One of the biggest challenges for startups is keeping costs low. Companies that can do great things on a small budget are usually the ones that end up succeeding while countless startups failed before taking off because of excessive spending. The worst part is that cutting costs can usually be done by making a few simple changes and ignorance is one of the main reasons why many startups end up overspending. Let’s take a look at how you can minimize costs in a startup.
Outsourcing What You Can
One of the most effective ways to minimize your startup costs is to outsource some of your main functions. Some of the things you could outsource include HR management, payroll, and marketing, just to name a few. You can also have multiple functions handled by one team. Some services will offer HR outsourcing and payroll management at the same time, for instance. This will not only allow you to cut costs but have more time to concentrate on growing your business.
You have to take advantage of your options when working with suppliers. If you have one important component or resource that you need to buy in bulk or import, you cannot have a relationship with just one supplier. You need to always be speaking with at least three suppliers. This will allow you to get the best prices possible and will also solidify your supply chain.
Also, make sure that you negotiate with any utility provider you’re working with. Things like phone, electricity, and business car insurance can all be renegotiated, and some services will help you compare between service providers fast. So don’t hesitate to give our current providers a call and let them know that you’re looking around too if they seem unwilling to give you a better deal.
Use Credit Card Rewards
One small trick that more startup owners should use is maximizing the potential of business credit cards. There are so many different cards geared towards business owners specifically that could allow you to save on everything from gas to plane tickets and office supplies. Charging your card for most expenses will allow you to rack up rewards fast. You’ll also get a chance to build your business credit.
Buy Used Items
Try to go for used items whenever you have the chance. Things like office furniture and computers can all be bought and used at a huge discount. Some offices will even give away their furniture to save time, so you could make incredible deals that way.
When it comes to electronics, you should look for refurbished items. Try to buy them directly from the manufacturer if you can or from places where you can verify the buyer’s reputation, like on eBay, for instance.
All of these tips will allow you to significantly cut your expenses and give you a little bit more room to breathe. You’ll also be able to reinvest the money you’ve saved towards more important functions.