December 28, 2015
The biggest challenge for new business owners is how to start. Sourcing for capital, registering a business name, and getting official papers ready could be overwhelming at the initial stage.
However, once the business has hit the ground running, they’re faced with the new challenge of how to sustain it first, before making profit. It’s very essential for startups to run on a budget because it enables them to save for unexpected costs, helps them meet their financial goals, and provides room for expansion.
So if you’re just starting out, these are 5 actionable ways which you can reduce the running cost of your startup, with a view to maximizing profit.
1. Hire Competent Staff
The importance of working with well-trained and versatile staff can’t be over-emphasized. Since you’re trying to get the best results with a lean budget, you should hire people who possess two or more skills. This will limit the number of employees you’ll be hiring, and the overhead cost on them.
For example, if you run an ad company, you can hire a secretary that is proficient in the use of office tools, who can do basic designs, and who can also write good articles. But you must be careful not to overwork them to avoid burn out and counter-productivity.
2. Develop a Customized Mobile App
Apps are amazing tools that can assist your business in great ways. They make your job easier and solve problems which would have hitherto cost you a lot of time and resources.
Having your own dedicated mobile app can be very useful in providing better customer support, collecting feedback and data about customer behavior, and improving lead generation. This way, you could stay in touch with all your customers 24/7 without having to hire more hands.
3. Use Partitioned Offices
Making use of partitioned office space is another way to reduce the running cost of business. Instead of renting a whole flat of four or five rooms, you should consider getting a fairly large hall which can be divided into small partitions.
Apart from being a less expensive way of creating separate office spaces for your employees, it also gives room for more concentration and privacy. However, you must be careful not to choke things up. Make the partitions spacious enough as to allow for adequate ventilation.
4. Save Cost on Automobiles
Automobiles are very essential in some business operations. If you run a business that requires physical mobility, it’s smart to get one which won’t cause too much strain on your finances.
There are many strategies you can apply to get inexpensive, but highly efficient vehicles. You can get a truck that will serve the purpose of carrying you to your destination, and which can also be useful for moving light goods.
Remember that at this stage, your spending has to be modest. When the business has gained much footing financially, then you can consider getting more befitting vehicles.
5. Buy Wholesale Products
When purchasing office materials, it’s best to buy them in bulk. Look for vendors that sell wholesale products, and who can deliver them directly to your office. However, you must be careful not to buy sub-standard products which are usually cheaper, as this will not help your reputation.
What you can do is to take advantage of discounts whenever they’re available, and if you’re making online purchases, you should watch out for sales coupons.
With the burden of high-running cost carefully eliminated, you can gain a lot of ground and reach your break-even point much more quickly.
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