9 Ways To Save Money When Starting A New Business
Dec 01, 2018
9 Ways To Save Money When Starting A New Business
1. Bootstrap When You Can
Unless you’ve brought on investors or have a sizeable savings, starting a new business is all about bootstrapping when you can. That is, finding areas you can save money by doing it yourself so you can spend money on things you can’t.
What you can bootstrap depends completely on your skills but don’t assume just because you haven’t done something in the past that you are incapable of doing it. The internet is a great resource as is YouTube. If you’re opening up a retail store perhaps you’re able to run that outside electrical plug without the need for an electrician. If you need to build out an office space, buy from IKEA and spend some long nights assembling the furniture yourself.
Many young businesses assume that they need to spend 100% of their focus on their business and outsource every other aspect to other companies. Unfortunately, a lot of those businesses will fail. The businesses that succeed know that every dollar they don’t spend is a dollar they can put to something else. Late nights busting your butt or some extended study time on YouTube can be business-savers.
2. Don’t Pay For A Website
A website will likely be your single most important marketing tool and here I am telling you not to pay for one. Why? Let me step back and say that if you have the budget to pay a professional to complete your website, do it! Or if your website literally IS your product then that puts you in a different boat as well. But for the majority of small businesses that are starting a retail store, consulting business, or other similar business, there are good enough DIY products out there that can get you by until you’ve proven your business model as successful.
A great option is WordPress.com which will allow you to create a (almost) free website using pre-made themes. Plug in your logo, some information on your services and an about us page and be done for the time being. In the beginning, most people who visit your website will likely be your own referrals who simply want to learn a little more about you.
As your business grows and your website begins to become the ‘first-impression’ of your business, it then becomes time to hire out a professional web design company to make you look great online.
3. Don’t Pay For A Logo
Similar to the above, bootstrap your logo until you prove proof of concept. There are some great tools out there for creating a simple, free logo. Have a look at Logomakr.com or logojoy.com. Or if you have some basic Photoshop skills, go check out graphicriver.net where you can buy pre-made logos for under $40.
Logos can be extremely important to an established business. Not only do they establish your businesses identity but they can be very expensive to change one your business gets rolling. For example, if you have advertisements on billboards, on PPC campaigns, on your website, business cards, letterheads, etc. you would have to pay to have each of those replaced with your new logo. That’s why people are willing to spend a considerable amount on professional logo design to ensure they get it right the first time.
However, in the case of a new business that you are hopefully bootstrapping along, you likely won’t have as many assets or campaigns and if you do you’ve created them yourself. Changing your logo after your business gets rolling will not be a huge undertaking.
Once your business is established, we would absolutely recommend hiring a professional to handle logo design & branding.
4. Stay Away From Lawyers If Possible
This will vary business to business but in general, try to stay away from lawyers. They will quickly kill your budget. If you are forming an LLC, most states have a very simple process for you to do it yourself. A lot of lawyers will charge $1,000 for something you can do in 30 minutes once you’ve spent a bit of time figuring out the process.
Stay away from trademarks in the beginning unless you feel it completely necessary. In many ways, buying a domain name for your website (yourbusiness.com) establishes a ‘placeholder’ trademark in this day and age.
Unless you feel it absolutely necessary to get a patent, stay away from those as well. Patents can easily be $10-$15k and then on top of that, if anybody ever encroaches on your patent you have to pay lawyers even more to fight it. Unless you feel it necessary, avoid patents and instead create a business plan that puts you ahead of the competition in terms of first to market.
5. Collect Business Reviews Immediately
As soon as your product or service goes to market, start collecting reviews from customers/clients. Get them to share the reviews across all of your social profiles and local business citations such as Google Business, Facebook, Yelp, Trip Advisor, Healthgrades, Zillow, Houzz, Avvo, and any other niche site in your industry that displays reviews.
In a recent survey by INC., it was found that 84% of consumers trust reviews as much as recommendations from friends. Whether you are a retailer, contractor, hair stylist, or consultant, people love to see reviews prior to giving you business.
There are some great services out there that help automate the review collection service. Arrivala is great for new businesses since they offer a free tier that can be easily upgraded as your business grows.
6. Constrain Your Rental Space
The need and type of space you are required to rent will vary based on the type of business you are opening. As a general rule though, start small and expand as you grow. If you are a single person consultant or offering a service that doesn’t involve much face-to-face with clients, consider working from home. Turn that spare bedroom into an office and make your in-laws get a hotel when they come to visit.
If you’re a restaurant or retail store that requires more visibility, get creative with ways you can use smaller, less expensive space without sacrificing the customer experience. Perhaps you can move that ‘managers’ office to your home and instead get more retail space out of the building.
Overall, rental space is a very controllable expense and also one that can eat up a lot of budget. Weight the pros and cons of any space and look for leasing opportunities that don’t tie you in for extended periods of time or provide an easy out.
7. Use A Credit Card For Everything
Credit cards can be a major advantage when running a business as long as they are used correctly. I’m not telling you to run up a huge debt and have the collectors chasing after you. I’m telling you to get a great credit card that offers excellent cash back points because let’s face it, you’re going to be spending money as a business.
There was a commercial on TV from Capital One (I believe?) that advertised how a business paid for all of his employee’s health insurance using the cash back points he received from simply buying everything with his business credit card. How cool is that?
Before you start your business go check out thepointsguy.com and see what he’s recommending as the best credit card offers at the time. If you have a good credit, apply for one and use it just like a debit card, paying off your balance on a regular basis. What the points add up and re-invest those points into your business.
8. Get Active On Social Media
Social media is like free advertising. All you have to do is H U S T L E. Find interesting articles that relate to your business and post them on your social media channels. Write interesting articles about your business and post them on your social media channels. Take fun pictures, show you have a good thing going and make people want to be a part of it.
A lot of people complain about having to deal with so many social media channels and how much of their day it takes up. News flash for you, every one of those social media channels is more opportunity for you to connect with your customers!
There are great services out there that help you automate social media posting. One of my favorites is socialpilot.co. They have a free plan that will work for most new businesses and you can always upgrade down the road.
9. Save On Technology When Possible
Try to cut back on technology subscription services in the beginning. This can include anything from computers to business phone lines to internet to that Spotify subscription. Keep it as light as possible until your business gets going.
For hardware components such as computers, try buying used from eBay or Apple refurbished. If you know what to look for (hint, do some research), buying computers off eBay can be a great deal.
For subscription-based services such as internet, make sure your business is 100% ready to go before subscribing. There’s no reason to get high-speed internet in your office or retail store while you’re still building out the office. Use your hotspot on your phone or wait until you get home to do your internet related tasks.
For a business phone line, consider using your same personal phone with the GoDaddy Smartline service. Very affordable and allows you to connect a second phone number to your existing phone. You’ll know if somebody is calling your business or personal phone.
In The End
Your business will only be as successful as the amount of work you’re willing to put in. Grind it out day in and day out, make smart decisions with your limited resources and you’ll more than likely be successful.