They say you need to spend money to make money, which is true. However, when it comes to starting your own business, most budding entrepreneurs want to save as much money as possible. Even online tech startups need money to get up and running, and that includes ones that are pitching to investors. But saving money while building a business isn’t always easy to do. Regardless of business type, there are ways to save money while scaling your business.
Identify Your Pain Points
Every founder goes through growing pains. That said, you need to find areas where you can cut corners and even save some money. Say you finished your MBA years ago and are paying off your student loans. Well, you’re trying to pay them off but aren’t really making any headway. You can’t really pay more, so the next best option is looking for a student loan refinance. With refinancing, you can save money, which you can then put back into your business or use to build your savings. If you feel refinancing is best for you, there are criteria you will typically need to meet for approval. These include a positive repayment history and a reasonably good credit score.
Create a New Budget
How you spend your money is just as important as how much you’re spending. Look at your current monthly spending to determine where most of your money is going. Aside from actual startup costs, what overhead costs cost the most? Itemize these expenses and then determine how to cut back on spending. Say your manufacturer is one of the top producers in the country, however, they’re also one of the most expensive ones. You could negotiate a better rate where you promise to order a set amount of merchandise each quarter. If they won’t or can’t comply, you could look for a new distributor. In some cases, simply saying you’re looking at other options can sway their decision to charge less.
Pay Off Other Debt
Mixing your personal and professional finances is never a good idea. Unfortunately, there are times when the two can overlap. If you find you’re having to dip into your personal accounts to cover business expenses, you need to find out why. Are you overextended with credit card payments, or have you run up a tab with a supplier that you can’t pay off? Either way, you need to reduce business debts and create a payoff strategy that makes sense.
Make Friends with Technology
Project management apps and digital invoicing tools are just two examples of how technology can help you grow and save more money. Instead of paying someone to map out your growth strategy, you can use an online program that does the work for you. You can also invest in an invoicing app that makes monthly billing a lot easier. All you do is plug in the figures and the app calculates everything for you.
Work From Home
Unless you employ a large staff that needs to work in groups, you should work from home. You can save thousands of dollars just by not having to pay for office space, utility bills, and insurance. In fact, unless you work in the food industry, most companies can work virtually or meet up at designated workstations when needed. Most want to work from home anyway, so going remote is a win-win situation.
Think Big, Start Small
Even before you put your idea out there, you probably had big dreams for your brand. After all, becoming your own boss is all about working a job you’re passionate about. But once it comes time to crunch numbers, you may have realized that dreaming big really isn’t the same as being able to be a big corporation at first. That’s why you need to start small and grow incrementally. Investing all your capital without seeing a profit usually ends one way: in failure. Pace yourself and invest in specific areas that show the most promise.
Only Buy What You Really Need
Before making any business-related purchase, go back to your budget and see if you can really afford it. Spending money on non-essentials is simply just a waste of money. Instead, invest in things or activities that will help you grow and possibly net a profit later.
Go Paperless
Shredding documents is not only tedious but can also cost you money. That’s why it’s better to go paperless as much as possible. You can make all your bills paperless, which is better for the environment and your bank account. It will also keep your workspace free of clutter as well.
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