Top 10 Financial Tricks on How to Save Money for Your Startup
If you want to launch a startup or take yours to the next level, you need money to make things happen. Sure, investors are excellent, but they often want to see a bit of success before they throw in. In the meantime, it’s up to you to keep things funded. This means finding ways to save money everywhere you can and earning extra as well. The more you can reinvest in your company, the faster you can grow. It’s also easier to stay on top of business expenses this way. Check out these tricks for saving money for your startup.
1. Start with a Pared Down Version of Your Business
Your ultimate vision for your startup may be a trendy boutique in a quirky neighborhood, or a busy office full of developers working on the latest technologies. Everything you do should be working towards those dreams. However, in the meantime, you have to make money to progress. That could mean starting with a pared down version of your business. What can you do to begin making and selling your product or offering your services quickly with a minimum of overhead and complexity?
Some strategies could be selling products on Etsy, advertising services on internet marketplaces or school billboards, or starting with just one product or service and expanding later on. Remember that you can use the money you make in the beginning to invest in what you need to grow.
2. Keep Personal Expenses to a Minimum
Now is the time to start cutting down on your expenditures. Start making your coffee. Eat meals at home or pack your lunch. If you can’t give up an indulgence shop sales and use coupons. Look for better deals on phone plans, cable, and wi-fi. Use the library instead of the bookstore. Each time you are tempted to spend money, think of how that could be used in your new business.
3. Brainstorm Any Cash You May Have
You could have some hidden cash that you don’t know about or haven’t considered. First, check with your parents. Are there any savings bonds sitting around from your childhood or old, passbook savings accounts? What about things you can sell? When was the last time you road the mountain bike in the garage or played XBox live? You might even be able to get a bit of money from your old prom dress or any designer clothes you might have on hand.
4. Get it Used Whenever Possible
Unless buying new is necessary for safety and quality, always check out used versions first. Office furniture, computers, printers, and other equipment can often be sourced used at a significant discount. Here’s something even more useful. Sometimes, you can get more for your money purchasing used than you would buy a new ‘discount’ version of something.
Think about business attire. You can go to your local, big box discount store and buy a no-name suit off the rack for less than 100 dollars. It won’t be very well made though. You may have another choice. If you take the time to look in second hand or thrift stores, you can likely find a barely used, well-made suit from a known designer for the same price or even less. Remember that high quality, well-made items are often donated for the tax deduction.
5. Think Twice Before You Spend
Even when you do have money to spend on your business, proceed with caution. You never want to be in the position of being unable to take care of a need because you paid for a want a week ago. If you have partners, consider making an agreement where all expenditures require the approval of two people, and expenses over a certain amount require unanimous buy-in.
6. Consider New Markets
Sometimes the key to saving money is to generate more revenue. One way to accomplish this is to reach out to new market segments. This might include targeting new demographic groups or locations. If you have an e-commerce business, you can do the latter without buying a single plane ticket. You just have to research, and determine where your potential customers could be. Once you do that, you can use language translation services to translate your product descriptions, landing pages, and other content. A website localization service can also help ensure your message comes across as intended.
7. Collect Your Debts
This can be difficult because your first customers are often friends and family. Unfortunately, when you are starting a business, customers may feel as if they are doing you a favor by using your products or services. They may feel as if they can take their time with payment.
First, let’s get one detail very clearly. If you have a product or service that is so unpolished and flawed that others are doing you a favor by using it, you shouldn’t be offering it to anybody. So, let’s assume that if you have customers, you have a worthy product.
This means you deserve to get paid. Staying on top of your AR is essential. This is how you pay your bills and put money back into your company. Don’t be afraid to send out invoices. Some people may need an electronic or paper reminder.
8. Make Use of Community Resources
Your community or college campus may have resources available for entrepreneurs just like you. Some may be designed specifically for people launching startups. For example, your local library or chamber of commerce might have classes for emerging business owners. There may even be a startup hive or coworking space where you can use office space, printers, wifi, and other resources to help get your business going. If you can find a resource like this, you can often find great networking opportunities as well.
Don’t forget your college campus. Even as an alumnus you may be able to access resources, advice, and mentors. Don’t be afraid to reach out to your alumni network. They are there to help.
Finally, even if you are not prepared to get a full, business loans, consider local microlending options. These are small loans intended for particular purchases. You have to repay them, but they can be a good option when you are just getting started. Just be aware that you usually will not get the money directly. For example, if you need funds for quick translation services, the bank would likely pay that company directly.
9. Create a Budget and Stick to It
Until now, your only concern may have been making it from one paycheck to the next. Now, you have to do that and save money for your startup. You can’t make a plan to save money without planning how you will and will not spend your money. This means sitting down and creating a strict personal budget and then sticking to that. Part of that budget should include placing money into savings to be used in your startup. Even if that amount is minimal, it is essential that you commit to it and follow through. After all, if you won’t invest in your business why should anyone else?
10. Try Crowdfunding
Crowdfunding is a great way to raise small amounts of money across a wide number of sources. You can crowdfund informally among friends and family members, launch or own campaign via social media, or use a crowdfunding site such as IndieGoGo or Kickstarter. When done correctly, crowdfunding is a great way to get the funds you need while getting people excited about your business. Done incorrectly, and it’s not much better than spamming. Follow these guidelines:
- Be detailed in how you will use the money. If you need it to rent office space for six months, mention that. If you need online translation services, explain why.
- If you are raising money for multiple things let people know the amount of money you need for each. For example, $500 for a professional translation and proofreading service and $1500 for raw materials.
- Respond to people who donate or simply offer their support or advice. As money comes in, give updates on any progress. Don’t leave folks wondering where their money went.
- Offer small but meaningful repayment. This might include freebies or discounts in the future.
- Create a video to generate excitement and help people understand your business. At the time it was released, the Kickstarter video for Exploding Kittens made it the most funded startup on that platform of all time.
- Promote your campaign on social media, but don’t go overboard. Stick with one or two mentions a day with plenty of other content.
Conclusion
Use these tricks to save money and generate a bit more cash to put back into your startup. The more money you have, the more you can spend on research, growth, and marketing. This will help draw in new customers and future investors.
About the Author:
Margaret Reid is a freelance writer who is seeking to discover new ways for personal and professional growth. Currently she`s working in the company The Word Point and trying to improve herself in the blogging career. Margaret is an experienced and self-driven specialist who cannot imagine her life without writing.
