Preparing to launch your startup takes more than motivation and time. It requires quite a bit of capital to get things going and even more to maintain operations in the future. Before you even think about setting up shop, experts recommend that you have at least one year of business expenses in savings, a minimum of three to six months of personal expenses on hand, and an emergency stash of cash that you can use when you find yourself in a bind.
Although it might seem like it’s impossible to save the funds you need to officially launch your startup as you travel to meet with potential clients and purchase necessary items and software, there are several simple things you can do to cut your spending and save your funding. Here are six financial tips to help you save on necessary expenses as you build your company:
Identify Perks and Benefits
If you travel often for your business, chances are you’re earning quite a few perks that you might not be using to their full potential. As a business owner looking to save money where you can, identifying and utilizing any and all perks available to you will be important.
For example, maximizing your potential for earning sky miles will be very important as you plan your personal flights and business trips. Reading up on the perks of the credit card you use for business and personal spending will also be important as you might be eligible for cashback and discounted services.
Barter and Trade
Many startup owners offer their goods and services in exchange for the goods and services they need from other companies or freelancers in an effort to save a little cash as they grow their businesses. For example, if you’re working with a freelance designer to update your site, you might consider working with him or her on a trade basis where you mutually benefit from the transaction without having to shell out extra cash for design work.
If you’re new to the process of identifying and working with others to trade goods and services, the International Reciprocal Trade Association helps business owners find other companies that are also looking to barter for goods and services.
Outsource One-Off Projects
Outsourcing one-off projects like development work for website updates or public relations for an event can help you cover your business needs while avoiding the fixed, recurring costs involved with hiring a full-time employee to handle these projects for you. You can find a contract worker to do just about any task you need.
You can use sites like Elance or Upwork to find freelancers who meet your specific needs and have the qualifications and experience necessary to complete each project you send them.
Build a Remote Team
Overhead costs for building a cool, startup-worthy office can get pretty outrageous when you’re just starting out. This is why many new startups are choosing to employ a team of remote workers who use their own homes as an office.
If you find that it's impossible to perform your daily operations without being in the same room as your team, you might consider investing in a membership at a coworking space rather than shelling out the cash each month for the lease on an office space.
International coworking accommodation companies like Impact Hub and WeWork offer coworking spaces across the globe that can help you fulfill your office space needs on the cheap.
Find Free Software
There’s nothing wrong with taking advantage of a good free trial period in the interest of saving on business costs. You can find lots of free and inexpensive options for the software you need to complete daily operations.
For example, your financial team could use Money Manager Ex to work together on accounting needs without paying for an accounting software, your project management team could use MeisterTask to track progress and manage individual projects across your company, and your entire team could use Google Drive to share files and collaborate on projects
Keep Personal Expenses to a Minimum
Cutting your personal spending will play a major role in your ability to put more money into your business as it grows. This doesn’t mean you can’t go out for dinner or see a movie until your startup is profitable, but it does mean you should be a bit more aware of where your money goes.
For example, purchasing a new car or a new home might not be completely necessary at this time as it would be more beneficial to put the money into your business. You might also want to take a closer look at your spending habits using an app like Mint or Level to see where your money is going and how you might be able to cut back a bit.