For startups that are only a year or two old, you’ll understand that it takes time and patience to get momentum for your sales. There’s a lot of groundwork to do to make sure your business is in the right place before you’re likely to start seeing a healthy return.
Financial issues are cited amongst the top reasons why half of startups don’t survive beyond the first five years, which is why you should keep tight control over your outgoings.
Creating Your Business
Before your business is likely to see any return at all, you’ll have to invest your money in setting up your business and making sure you’re ready to sell your products to customers. Some of this process is likely to include considerations like:
- product design
- product development
- licensing and patenting
- a website
On top of this, you have to make sure you have a reliable supply chain in place, including your logistics. It’s beneficial to get these relationships established early – the right delivery service will help you send products to your customers quickly and help you uphold your good reputation. These outgoings are essential, but don’t necessarily have to break the bank if you form a good relationship with suppliers.
For short term jobs, it may make sense for your start up to bring in freelancers or contractors to help you on certain projects. This could be vital in the early stages of your business, for example if you need someone to set up your website.
Freelancers will bring their expertise to your business and you’ll only have to pay them for the work that they do, rather than budgeting for a full-time salary and benefits.
Plus, if the project has been successful, you can hire any temps that stand out or that you feel will benefit your business, which would help you reduce the normally expensive recruitment and training costs.
Take Advantage of Technology
Startups should consider going paperless in their early years. Not only will this establish your business’s green credentials, which is great for business efficiency, it can help you save money too.
Rather than printing out all documents and contracts (contributing to expensive printer, toner, paper and maintenance costs), make use of technology and store all your important documents on the cloud.
Also, you should consider using video calling technology like Skype to conduct interviews, hold business meetings and teleconferences so that your startup can cut down on travel costs. This has an added advantage as it allows your employees can work from home too – you can stay in touch with their daily progress through email or Skype’s chat function. Plus, they can access important documents remotely from the cloud.
Buy Used Equipment
You can find huge discounts on equipment or technology that’s second-hand. This doesn’t necessarily mean that it’s been well-used or that it’s got problems with it – it could be that it’s just a few months old and a new version has been released.
This could save your business a lot of money, particularly in the earlier years whilst your company is still growing. Then, once you’ve started making a healthy profit, you can start investing in new equipment of your own.
Give your startup the best chance of success and establish it as one of the 50% of businesses that survives past two years. By cutting your operational costs early on, you’re giving your business the best groundwork for eventually seeing a healthy return. It’s likely to be hard work and a lengthy process to get your business to this stage, but it’ll be more than worth it in the long run when your business grows and thrives.