10 Ways to Make Your Startup More Cost Effective
Getting a startup off the ground does require money, but there are many ways that you can reduce your expenses. Simple adjustments can make you less reliant on loans and investors, and make it easier to turn a profit. In other words, placing an emphasis on becoming more cost effective could ultimately make the difference between success and failure.
1. Consider Outsourcing Infrequent Tasks
Outsourcing has become a dirty word to some people in the business world, but the reality is that it can be necessity for a startup. Instead of outsourcing common tasks, though, the goal is to identify things that do not happen frequently enough to train a staff member how to handle them. For example, if you only put together flyers once a quarter, it may not make sense to employee someone who specializes in designing promotional materials. Outsourcing this task instead can ultimately save you money and provide better results.
2. Cut Utility Expenses
Utility costs are skyrocketing. Because of that, a single business landline can cost up to $100, and even baseline Internet is likely to be at least $70 per month. Although there are some areas where you may be unable to reduce expenses due to a local utility monopoly, you do have the ability to save money on telephone service. Turning to a VoIP business line such as those offered by Nextiva can cut up to 80 percent off of your bill.
3. Use Telecommuting when Possible
Telecommuting is much more than just a way to please your employees by letting people work from home. Keep in mind that each person who is in the office actually costs you money by requiring more electricity, water and paper products. Therefore, keeping workstations powered down while employees telecommute can be very beneficial.
4. Implement a Four-Day Work Week
A whopping 43 percent of companies are now offering at least some employees the option to work four days a week, and the benefits are staggering. Not only can you shut the entire office down for a day and save on utilities but your workforce will be more creative, happier, and more productive. With all of these perks, it is no wonder that the four-day work week is rapidly gaining popularity.
5. Build a Strong Social Media Presence
Marketing is vital, but you do not necessarily have to budget an exorbitant amount of money to connect with current and potential clients. Social media has drastically altered the way that businesses communicate with consumers, and the Internet has made traditional marketing methods much less viable. Companies report a 54 percent increase in leads from inbound marketing, and this includes free or discounted methods such as tweeting and posting blog entries. Consequently, focusing on your social media presence is one of the best ways to drive traffic to your website without paying for it. Be sure to encourage your customers to write an online review and to check-in if you have a brick and mortar location.
6. Get Professional Advice
The desire to save money can end up costing you an arm and a leg if you fail to seek out professional advice for certain topics. After all, unless you are a tax or payroll expert, it is highly possible that you will make an expensive mistake. With this in mind, it is recommended to get professional advice about important tasks that you are not well-trained in. Taking on this expense can save you money and time in the future, and it may also help safeguard your company’s reputation.
7. Start with a Soft Opening
Many businesses utilize the so-called soft opening to begin generating sales and interest without investing as much money. This is a wise approach because you will not need to be fully staffed or have a full inventory to test out the market. Another nice perk of a soft opening is that it can help you work out any kinks or employee training issues before a large amount of people are exposed to them. You may also discover that one of your products or services is not as desirable as you thought, which will let you focus less of your inventory and marketing budget on something that is not going to become a big moneymaker.
8. Implement Organizational Tools
A lack of proper organization can be very damaging, and not just because this type of work environment is not conducive to a productive day. If you do not get all of your inventory properly organized, you are much more likely to experience unexpected losses. Unfortunately, a loose setup such as this will also be much more welcoming to a dishonest employee who wants to steal from you. Use storage organizers to keep physical products easily accessible, and be sure to put a good inventory tracking system in place to minimize wasted time and issues with filling orders on a timely basis.
9. Invest in Employee Training and Morale
Studies have shown time and again that training and workplace morale makes a huge difference in turnover rates and productivity. Each employee who is not properly trained costs a company $5,466 annually on average. Even worse is the fact that their job satisfaction rate will be lower, which can easily lead to turnover. Industry estimates indicate that the process of hiring and training a new employee costs $7,500, so it definitely makes more sense to invest in morale and training improvements. Keeping your current employees educated and happy is one of the best ways to run a more cost-effective startup.
10. Barter and Negotiate when Possible
Many people believe that bartering is dead and negotiating a lower business rate is not possible, but this is definitely a misconception. The reality is that small businesses barter and negotiate all the time. A prime example is that people who provide services such as acupuncture or massage therapy often trade services with another licensed professional. No money exchanges hands, but both parties get something valuable for their time. In order to cut costs, be sure to ask for any applicable bartering options. You can also negotiate contract terms to get the best possible rate.
Placing an emphasis on reducing expenses and becoming more productive will make it easier to transform your startup from the beginning stages into a successful business. Be sure to remain focused on being cost effective even after your profits begin to boom because this will ensure that you always get the most out of your hard work.
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