3 Easy Ways to Save Money for Your Startup

February 1, 2016

5:31 pm

So many beginners in the world of business want the big team and the huge office. But that’s not actually a good thing, nor is a big business likely. Bigger businesses will only give you more responsibility than you can realistically handle right now.

Keep things small and manageable in the beginning and grow slowly. Don’t join the ranks of the unicorn companies, where you are forced to go at speeds similar to a space rocket. To begin with, you need to raise money.

Rather than approaching investors to raise money, look at your own house and clean it up. These are three easy ways to save money to reinvest in your startup.

Reduce Your Liabilities

 Your liabilities are those items on your books that you pay out for every month. This includes everything in your office and any debts you may have incurred. This is one of the quickest ways of raising money for your startup.

First of all, let’s look at your business premises and what’s inside it. As a startup, you don’t need half as much space as you think. Instead of purchasing a whole office, consider co-renting a space with another startup. This is becoming more popular throughout the US as businesses in all sectors look to reduce the amount of money they’re spending.

If you need to downsize, consider selling some of your old office supplies. One company named igotoffer.com has formed its business based on the need for companies to downsize. They said, “We help startups offload office supplies, such as Macs and iPhones by giving them highly competitive prices with a fast transaction.”

Secondly, look at the people on your team. Do they all need to be there? Are they justifying the amount of money spent on them? Employing people is expensive. Sometimes it’s cheaper to bring in freelancers instead. Alternatively, you may wish to hire interns.

Internships are a necessity and you’ll have no shortage of candidates. In 2000, 1.2 million college degrees were awarded. This has doubled since then. Internships are no longer an advantage, they are part of the education process. Take advantage of it to save money.

Now we look at the second biggest liability in any small business. Debts are a big problem and can quickly cause problems. This is why you should refrain from taking out any large loans. Offer a stake in your company instead.

Use the Freebies in Marketing

You don’t need the TV or radio slot. You don’t need the billboard. You don’t need the fliers. Traditional advertising merits spending a lot of money on things you can touch. It may seem stupid to disregard them entirely, but this is what more and more businesses are doing.

There are more opportunities than ever before to market yourself for free. Marketing tends to be a company’s biggest ongoing expense, so it’s important to focus on how to reduce this without compromising your ability to sell.

Social media is the greatest tool ever created for marketers. It gives you a platform where literally billions of people have accounts. It provides a reach that simply isn’t possible through any other method, and it’s free to do most things. You can pay to play with things like Facebook ads, but it isn’t essential. As long as you have a plan of attack, you can gain a lot of business without spending a dime.

Another freebie is content marketing. If you have a competent writer on the team and you know your audience, you can write and publish content on your website and on blogs as a guest writer. Promote it on social media and over time you will see your stock rise.

The only difference between paid and non-paid marketing is the speed of things happening.

Angel Investors

 This article has already addressed the biggest areas of spending within any business. Now you have to think about going out and finding people to invest in your company. A new trend is to seek out angel investors. These are individuals who will finance your startup without the expectation of big returns that come from banks and conventional investors.

There are many online platforms designed for companies looking for angel investments. Here are some tips for maximizing your chances:

  • Give realistic forecasts.
  • Be transparent.
  • Reveal any potential risks and drawbacks.
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AJ Agrawal is an entrepreneur, speaker, and writer. He is the CEO and Co-Founder at Alumnify Inc.

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