Whether you just came up with a business idea or you’ve already been in business for a while, you are quickly coming to the realization that, starting a business or working as a freelancer can get pretty expensive. Many businesses fail within the first few years, mostly because of high startup costs and overhead expenses.
To make sure I give myself a fighting chance and thrive as a successful entrepreneur, I had to put on my thinking cap and be a little unconventional. Below are some creative ways I’ve found for keeping startup expenses low.
[highlight]1. Use your time and skills as currency[/highlight]
Don’t limit yourself to using money as the only means of exchange. There are many other options available, like exchanging your time and skills as currency instead. Bartering is a simple way to create a mutually beneficial exchange without using money. And since startups thrive on cash flow, this method can be very valuable if used wisely. Here’s a few advantages of bartering:
- Frees up excess inventory
- Preserves capital
- Increased media exposure
- Helps with seasonal ebb and flow
[highlight]2. Cash flow everything[/highlight]
One of the biggest downfalls of small businesses is when they take on too much debt and grow too fast. Your brand will be much more successful if you cash flow as much as possible in the beginning and avoid business credit cards or loans. This will help you and your business to learn and grow together, and in the event it fails, you will be able to recover much quicker.
If you do choose to take on business debt, be sure to research the smartest methods and have a plan to repay the money. If you wanna compete with the big boys, a good foundation is a necessity, and you need to take the time to build it properly.
[highlight]3. Know when to DIY (and when not to)[/highlight]
As previously mentioned, time is a very valuable commodity and can be used to save your business loads of money. Having the right skills and talents can be awesome tools in your DIY arsenal. If you like working with numbers, then you might not need to hire a team to do the bookkeeping, or if you’re good at marketing, you can do your own PR.
However, it’s important to understand when it’s smart to DIY and when it’s not. Learn from other people mistakes, and don’t waste your time trying to “save money” by doing it yourself. In the long run, getting expert help may be worth the initial investment. And it might keep you from spending extra money to fix a problem you created in the first place.
[highlight]4. Fully optimize your network[/highlight]
Having a solid network is probably the most beneficial bargaining chip you have. Not only can you call upon favors from experts within your family and friends, but you can connect with trusted colleagues within your professional network.
With social media networks like LinkedIn, the wealth of knowledge and expert advice is almost limitless. Your network of co-workers, friends and family can be your best assets when it comes to getting the word out about your new business venture.
[highlight]5. Eliminate high priced services[/highlight]
Many of us have this misconception about “getting what we pay for” and often choose to spend money instead of getting stuff for free. With so many unique business ideas available, many of the free services are just as good, if not better, than the paid ones. Those pricey monthly services can put a big drain on the company’s cash flow, but you can eliminate them by looking for lower cost, or even free services, without sacrificing quality.
[highlight]6. Promote a virtual office[/highlight]
Another big business expense is overhead for a physical office space. Fortunately virtual offices and shared office spaces are becoming very popular, which can save a lot of much needed capital for new companies. Co-working spaces play a major role for freelancers and startups by saving them money on rent and other office related costs. For the price of a cup of coffee, you can just as easily use a local coffee shop as a your office space. Having a virtual office means you can work anytime and anywhere, with little to no outflow of cash.
Skimping on expenses for your new business doesn’t mean you have to skimp on quality. By being a little scrappy and taking time to do some research, you will find there are simple ways to keep business expenses low. This will give your business a jump start on a solid foundation and increase its overall chance of success.
Author bio: Carrie Smith is the writer behind the Careful Cents personal finance and lifestyle blog. She is passionate about all things money, career, debt and travel. Her work been featured on The Huffington Post and Brazen Careerist.