5 Effective Ways to Save Money and Start a Business
BY: JOYDEEP BHATTACHARYA ON WEDNESDAY, MARCH 21, 2018
I am personally inspired by the words of an entrepreneur, Jason Sugarman, who says “Don’t make investments when you are emotionally vulnerable”. This advice is so true because all our investments are emotionally biased.
If you’re a startup – money’s too tight to mention, already. You can’t tuck away hefty portions of your earnings as savings, have debts to clear off, and need to hold on to existing working capital dearly.
Saving money where you can, hence, becomes as much a value-adding skill as a survival skill. Always think about trimming overhead costs, strive to rent instead of owning assets, keep on pushing office resources for more productivity, and think well about the major financial choices you make.
In this guide, I’ll help you with 5 effective ways to save money as you try to make your startup stable and strong.
1- Go Green, Smartly
Many of the green energy solutions marketed by giant corporations are not exactly financially viable for startups and SMBs, at least for now.
However, there are still several green energy options and environment-friendly office management practices that will not only give you flaunt-worthy credentials on your marketing brochures but will also save a lot of money, regularly.
For instance, compact fluorescent light bulbs, complemented by a structural design that lets daylight take care of the lighting requirement of office floors, can save you as much as 75% of your annual light bill.
Avoid unnecessary expenses in office stationary by helping your staff nurture a habit of not depending on paper printouts for communication and information recording.
Follow the guidelines and best practices suggested by Energy Star, a program run and managed by US Environmental Protection Agency, for updates from the smart green energy world.
2- Postpone Personal Rewards
This is perhaps the biggest pitfall for startup entrepreneurs. This big pitfall is cramped for space because almost every other entrepreneur takes a fall inside! Don’t let the vision of future success bling your financial decisions and spending choices for the present.
For instance, entrepreneurs would do well to reduce the burden on the company by taking minimal salaries, with a high proportion of performance-linked bonuses and create a company culture that attracts millennials. Also, I’d recommend you to keep employee benefits to the minimum mandated legally. Plus, watch how you travel and entertain guests. Assume you’ve got to pay the bill out of your pocket and do accordingly.
3- Compare Prices Online
Before your business becomes big enough to be able to enjoy the services of consultants to select vendors for crucial annual contracts, trust the basic art of online price comparisons to be able to save substantial sums and to buy better.
From used laser printers to short-term loans, you can buy most the products and services online and can also compare their prices online. Particularly for products and services that bring alongside a recurring cost, this is an essential pre-purchase activity.
Take, for instance, insurance. A single mishap within the office, a risky product leading to the lawsuit, a car accident involving a vehicle registered under your business – anything could push your business back by a few years on its road to success. Instead, compare policy premiums online. TheZebra, for instance, helps you compare auto insurance policies online, getting you quotes from the leading insurers in seconds, and assisting you in choosing an affordable, dependable, and reliable package, with sufficient coverage.
4- Manage Your Procurement Via Purchasing Cooperatives or Group Purchasing Organizations
A purchasing cooperative is made up several businesses that wish to purchase goods and services by aggregating their demands. The purpose of this aggregation is to be able to attract competitive prices from vendors, comparable or better than those enjoyed by individual large businesses.
A good example is CCA Global Partners, one of the largest purchasing cooperatives in the USA. The organization helps member businesses get reasonably prices goods and services from industries such as financing, insurance, lighting, mortgage banking, transportation, etc.
In many markets, group purchasing organizations are more approachable for small businesses, particularly when purchasing cooperatives are owned privately or by the government. Most of these group purchasing organizations don’t charge any fees from members and help them solve most of their supply chain management and procurement problems quickly.
5- Go for Cloud-Based Software and Opt for Outsourcing
Trust me, software license costs, server maintenance costs, and all associated costs – they’ll take a toll on your profit and loss statements sooner than you realize. The solution – from day 1, question your over-enthusiastic IT vendors about the existence of open source and cloud-based alternatives to hosted applications and let them convince you of the necessity of paying 5X for what you can get at amount X.
Moreover, if you want to save money on IT-related expenses then opt for outsourcing. India leads the list of top 10 countries for outsourcing but Eastern Europe especially Ukraine has now started to make its presence felt in the outsourcing world. Hence, if you are serious about saving money then outsourcing can be your best option.
The moment you put your foot off the brake pedal, the expense car will zoom forth. Instead, stay focused and in control, and adopt these 5 methods of saving money for your startup business.
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