Want to save money? Want to make your business more profitable? What you spend is what you waste. If you’re spending more than you earn, then how can it be any other way? But there are ways to limit costs and increase profits all the same. Here are six ways to permanently cut expenses for your startup.
People are your biggest investment. Whenever someone leaves or there’s a termination, there should always be a recruiting process with minimal wasted time and maximum efficiency. Some companies may opt to undertake the hiring process in-house for various reasons like low trust in recruitment agencies.
However, other companies, particularly small businesses, can benefit greatly from agencies like Employer Advantage, which offers blanket services ranging from compliance, hiring, and consultation. Plus, you can never go wrong with a hiring agency because it reduces the risk of making a wrong hire and streamlines the entire process for efficiency.
If you’re concerned about the cost of an agency, just know the price you’d pay would amount to equal that you’d have spent had you hired yourself.
Keep Track of All Expenses Immediately After the Launch
The first few months of any new business are a tightrope walk between development and expansion. You’re hiring staff, developing your product, marketing your wares – all at the same time. By contrast, costs are relatively low while income is slow to build.
It’s easy to face temptations from spending money on designer furniture or expensive accessories for your office. It may feel like you’re making an important statement about your business, but it can often come back to haunt you when you don’t control your overspending.
If there’s one thing that will call your long-term finances into question from the get-go, it’s failing to keep careful records of every expenditure from day one.
Consider outsourcing most of the services
If you’re not careful, your office will turn into a small version of the Kremlin in no time, with everyone fighting over who has control over what. If you have an accountant, take care that their work is done to your satisfaction before they are given complete authority to balance the books and manage staff budgets.
Likewise, if you’ve hired a marketing manager, there should be set hours for them to work. Set times when all incoming calls are forwarded to another extension or voicemail and stick to it. The same goes for the busy season: make sure you agree on terms with outside contractors so that when things get hectic at work, they know enough to go home early while leaving one staff member on hand as a backup.
Assess Your Office Space
When you first went on the hunt for office space, everything seemed fitting and proper. You knew what you wanted: a decent room big enough to hold staff meetings and plenty of space for concentrating on long-term strategies.
However, if there are unused rooms, consider leasing or subletting them to other start-ups trying to get their business off the ground with limited resources.
Check Your Supplies
If there’s one thing that will destroy even the most resilient start-up faster than anything else, it’s outgoings. The problem is that once you get into the habit of spending big on a project to save a few bucks here and there, it gets harder and harder to go back.
For example, before you know it, you’ll have spent your entire marketing budget on one advertising campaign if you don’t strategize financially.
Always Buy Products in Bulk
As a rule, don’t start buying single items until you’ve worked out how much they will cost if bought in bulk. For example:
If you’re based close to a high street supermarket, there should be an online account that gives access to special offers – often same-day delivery at prices lower than buying in bulk from a local wholesaler.
If not, make sure that you check prices online before going to pick up any last-minute supplies. Quite often, supermarkets offer special discounts or gifts when buying certain products in bulk. So, for example, you may be able to buy 100 cans of beans for £1 if you are willing to pay a premium on the can itself (which is often worth it).
Cutting costs is a balancing act. As much as you might save by cutting out certain small luxuries, it may be worth investing in others to make the business more efficient and profitable. The trick with managing any start-up budget is to take your time, plan well, and don’t rush into things!