AussieTycoon
01-03-10, 12:48 PM
There's a fine line between establishing your new business on a shoestring and letting it fail due to a lack of funding. You don't really want to shell out massive dollars simply to get it off the ground, however you still want to ensure you look professional from the eyes of your customers.
One of the major challenges is always to preserve the image of a solid, successful company without allowing your expenses lead to uncompetitive pricing, and eventual business failure.
The trick is to determine the point at which your business runs both effectively and efficiently. This is a key concern for just about any startup and will determine whether you'll be able to survive. What's promising is, if you master the art of trimming expenses early in the game, you will establish good habits that'll serve you well as your company evolves.
Where to start?
The first thing to do is cut your original budget to the smallest amount. Odds are your business will start slowly, therefore accomplishing things for a small amount that may otherwise cost a dollar is a great discipline to stick by. So, what are some things you can do to keep your costs low in the early stages?
Workspace
Where you work frequently determines exactly how well you work, but you often will rough it a little while still getting things done. As an example, you need a desk. Have you thought to buy a good, used desk from a second hand retailer, or even an ex leased desk? You don't need that fancy desk to get started.. just somewhere to put your computer, phones, files and pens on.
You should even try to get to know a number of the bigger companies locally that are upgrading their offices and computers and are willing to cut a deal to get rid of older items.
Another suggestion is to negotiate with your property manager for free rent during your start up period - or if possible.. work from home?
The old adage of needing to have an office is out of date, many successful businesses work from home now and use coffee shops and restaurants as places to meet, great thing about this is that these 'entertaining' expenses may even be tax deductible!
If you must have office space, many office buildings are willing to reduce or even postpone rent for as much as a year simply to receive tenants in the door.
Stationary, Equipment and Services.
Everything from paper clips to computers are your work equipment, and everything from phone expenses to business consultants count as business services.
Every time you need to buy something or hire someone to help you out, why not ask for a discount? Or even ask for some sort of services trade, maybe you have a skill they need that you can trade them for?
Buy office supplies in bulk when you can. Rent equipment as well as motor vehicles, instead of purchasing them. Keep your fixed costs down by switching as much equipment and services into variable expenses as possible. This way your own cost of conducting business will increase only as your income grows.
Staff & Contractors
Controlling your employee expenses is by far the most formidable difficulty you are going to face. Employees are your biggest asset after all.
When you need to employ someone or contract work out, undertake it cautiously and intelligently, if an individual's performance isn't what you're looking for, you shouldn't be quick to fire them. Work with them to improve the way they work and communicate what you expect from them.
Although monetary reimbursement is essential to finding and keeping good people, it doesn't have to all be in the form of salary. Think about what we mentioned earlier.. the tip about converting your fixed costs into variable ones? It can also work in compensation as well. Add to a small income while using the potential for healthy bonuses determined by your company's profits.
Give your employees rewards, such as versatile work hours. Teach them thoroughly for his or her responsibilities. And take the time to provide them suggestions and compliment them on work that is well done. Always be passionate about your company and about them, engage them as much as you can, and make sure they know they are appreciated.
Marketing & Promotion
Everyone knows it takes money to make money, however you'd be astonished just how much marketing bang you can aquire with out investing loads of cash up front.
Word of mouth, and personal referrals always stand out as the most effective as well as cheapest type of advertising, of course that does mean a lot of networking.
Show up at business and community events to talk about your company, and don't neglect to focus on your most desirable customers. Cultivate possibilities to become a featured speaker. Work the trade show and seminar circuits, even without having the income for a booth or exhibit.
Remember the value of free media coverage. In the beginning, at least, you might make a fair go of writing Press Releases by yourself. Call editors at publications significant to your industry to tell them you exist. Write a couple of brief, newsy press releases and get them out to major newspaper publishers as well as magazines. Request interviews on subjects of interest to both you and reporters. Sometimes one or two content pieces can generate a substantial amount of business.
Maintaining startup costs to a bare minimum takes self-examination, resourcefulness and imagination. But while your business grows, you will find the skills, when mastered early on, will be keys to your ongoing success--and the real pleasure within your business.
One of the major challenges is always to preserve the image of a solid, successful company without allowing your expenses lead to uncompetitive pricing, and eventual business failure.
The trick is to determine the point at which your business runs both effectively and efficiently. This is a key concern for just about any startup and will determine whether you'll be able to survive. What's promising is, if you master the art of trimming expenses early in the game, you will establish good habits that'll serve you well as your company evolves.
Where to start?
The first thing to do is cut your original budget to the smallest amount. Odds are your business will start slowly, therefore accomplishing things for a small amount that may otherwise cost a dollar is a great discipline to stick by. So, what are some things you can do to keep your costs low in the early stages?
Workspace
Where you work frequently determines exactly how well you work, but you often will rough it a little while still getting things done. As an example, you need a desk. Have you thought to buy a good, used desk from a second hand retailer, or even an ex leased desk? You don't need that fancy desk to get started.. just somewhere to put your computer, phones, files and pens on.
You should even try to get to know a number of the bigger companies locally that are upgrading their offices and computers and are willing to cut a deal to get rid of older items.
Another suggestion is to negotiate with your property manager for free rent during your start up period - or if possible.. work from home?
The old adage of needing to have an office is out of date, many successful businesses work from home now and use coffee shops and restaurants as places to meet, great thing about this is that these 'entertaining' expenses may even be tax deductible!
If you must have office space, many office buildings are willing to reduce or even postpone rent for as much as a year simply to receive tenants in the door.
Stationary, Equipment and Services.
Everything from paper clips to computers are your work equipment, and everything from phone expenses to business consultants count as business services.
Every time you need to buy something or hire someone to help you out, why not ask for a discount? Or even ask for some sort of services trade, maybe you have a skill they need that you can trade them for?
Buy office supplies in bulk when you can. Rent equipment as well as motor vehicles, instead of purchasing them. Keep your fixed costs down by switching as much equipment and services into variable expenses as possible. This way your own cost of conducting business will increase only as your income grows.
Staff & Contractors
Controlling your employee expenses is by far the most formidable difficulty you are going to face. Employees are your biggest asset after all.
When you need to employ someone or contract work out, undertake it cautiously and intelligently, if an individual's performance isn't what you're looking for, you shouldn't be quick to fire them. Work with them to improve the way they work and communicate what you expect from them.
Although monetary reimbursement is essential to finding and keeping good people, it doesn't have to all be in the form of salary. Think about what we mentioned earlier.. the tip about converting your fixed costs into variable ones? It can also work in compensation as well. Add to a small income while using the potential for healthy bonuses determined by your company's profits.
Give your employees rewards, such as versatile work hours. Teach them thoroughly for his or her responsibilities. And take the time to provide them suggestions and compliment them on work that is well done. Always be passionate about your company and about them, engage them as much as you can, and make sure they know they are appreciated.
Marketing & Promotion
Everyone knows it takes money to make money, however you'd be astonished just how much marketing bang you can aquire with out investing loads of cash up front.
Word of mouth, and personal referrals always stand out as the most effective as well as cheapest type of advertising, of course that does mean a lot of networking.
Show up at business and community events to talk about your company, and don't neglect to focus on your most desirable customers. Cultivate possibilities to become a featured speaker. Work the trade show and seminar circuits, even without having the income for a booth or exhibit.
Remember the value of free media coverage. In the beginning, at least, you might make a fair go of writing Press Releases by yourself. Call editors at publications significant to your industry to tell them you exist. Write a couple of brief, newsy press releases and get them out to major newspaper publishers as well as magazines. Request interviews on subjects of interest to both you and reporters. Sometimes one or two content pieces can generate a substantial amount of business.
Maintaining startup costs to a bare minimum takes self-examination, resourcefulness and imagination. But while your business grows, you will find the skills, when mastered early on, will be keys to your ongoing success--and the real pleasure within your business.