Crucial to a new business is financing and then protecting the funds you have amassed, learn 4 easy ways to battle costs in a start-up business.
Every entrepreneur sits down and figures out a few things before starting a business. Of these things, money is one of the most crucial and most stressful ones to think about. “Will I get the amount I need?” “Can I survive if I raise or borrow less” or even “Is there a way to do what I am doing, or want to do, cheaper?” these and more are some of the nagging thoughts of every startup. Whether you are raising capital through an equity trade off, borrowing from family or your own investments and accounts, or taking out a loan, here are 4 ways that I started and run each of my businesses on less.
1.) Everything is a DIY (Do It Yourself) Project.
Dream of the day when you have a team of employees in your office working full force. You have someone to manage your Facebook, Twitter, and Instagram or Youtube Channel. You have someone who handles all phone calls. You have a receptionist. You have a teen doing paper filing, and another employee who handles in-house web design and content creation along with a marketing campaign. This is all costing you hundreds if not more a month to manage. At the start, you have to be your own builder of your business and do as much as you can on your skills set. This decreases the cost of running or starting a business.
2.) Grab the media with a compelling story.
I always say, “Everyone loves a good story!” this is more true with those in media: print, digital, radio, etc. If you can create a great story around yourself, your business, your project or so on, you may just be buying yourself some free advertising. Ever since the start of my first business one of my main thoughts has always been “How do I get more advertising on a lesser budget?” this is one of my main bootstrapping elements that I incorporate to any business. Consider benefiting a cause with one of your company events, co-brand with another organization, do you have an interesting personal struggle that led to your company? Mind you, don’t go hang your dirty laundry out for all to see just to get a story, you work all your life to build up your name and brand, one bad deed can put you back in the dark.
3.) Start at home or in an incubator.
This is one of the most simple to grasp and simple to do and ultimately is the cheapest. Why spend thousands of dollars a month to look fancy when you can simply start and run your business at home or out of your garage like some of the mega-giant corporations of today? Lean startups give you more room for trial and error, decrease stress on your success or sales needed each month, and provide you with the ability to allocate your funding into product development rather than rent. Incubators are wonderful if you need a professional space and are short on cash, trade equity for space. Check around to see if your local EDC or Chamber knows of incubator space.
4.) Spend as you go – Not on account (if possible).
Primarily this is my thought, “If you don’t have the money to buy it, neither does your business.” This keeps you from overspending, overpromising, and glorifying your business when you don’t have the proper amount of current and future business to make good on your accounts payable. A suggestion is, spend only if you know you can pay it off after a job is done. For instance, a photographer wanting to upgrade his/her camera or equipment might want to go buy a $2,000 camera, but is that safe or logical? The short answer, no. However, if she has a wedding booked and they are paying $2,000 or more for their package, you can buy the camera and turn around to pay it off, or buy it upfront if they pay before the shoot. Buy only what you need, only what you can afford now, or what you can afford to pay off immediately afterwards.
Startups are dangerous and can be costly, minimize your risk and maximize your results and profits through keeping your costs low, doing all that you can on your own skills, attracting media attention to your cause and story, and only purchasing when you know you can afford it.
Brandon Banks, a serial entrepreneur began his entrepreneurial adventure at a young age and currently travels to educate students on the possibility of seizing the day and moving toward their dreams of being their own boss. Together in collaboration with his network Banks disrupts common traditional barriers and exposes that through proper support anyone can be an entrepreneur regardless of where they are at in life.