How to Start Up on a Lean Budget


If you have an idea for the perfect business, one of the key questions you may be asking yourself is how much it will cost you to kick start that business. Web, mobile and some home based businesses can be started on a low budget. Most of these businesses can be bootstrapped from the beginning when your expenses are minimal. Initial startup expenses including incorporation, legal fees etc to get started are pretty much standard. Other expenses like rent, office supplies, marketing, payroll etc increase with time and could be reduced significantly.

Starting up a new business could also be expensive depending on your industry, business model and how you intend to enter the market. In a scenario like that, office furniture, computers, cloud apps, traditional software, rent, electricity , marketing etc may be inevitable. Most startups can still keep costs lean by using virtual office spaces or shared office spaces in your city. Some startups founders start their businesses from their garages, bedrooms, living rooms and later get more formalized into a standard business to keep costs low. In most cases you may not have the funding required hence the need to improvise to stay lean.

Its important to stay focused on the product or service you are building right from the beginning. Avoid the many office distractions that can rob you of your time and resources. Funds don’t come cheap, hence stay focused on the tasks and milestones you have set for yourself to achieve your targets as fast as possible.

Every business has it’s own specific cash needs at different stages of development. A realistic startup expenditure should only include those things that are necessary to start a business and once again they are specific to your startup requirements. You can  use a expenditure worksheets that lists both one-time and ongoing costs to determine your needs and requirements from the beginning. But even with that, you should determine what is  essential or optional and what can stay on that worksheet to help you stay lean.

When starting from the beginning, you probably do not need to have a dedicated accountant. Outsourcing is cheaper. Focus on what you do best as a business. Several services including administration, accounting, legal, programming and human resources can be outsourced to save money.

Be efficient with the resources you have. Staying lean does not necessarily mean it’s cheap. When gathering resources for your startup, always look for opportunities to rent when you have the option. You can dramatically reduce necessary expenditure such as energy costs by calling a business electricity advisor-these services are usually free of charge. Moreover, only hire where necessary. Hiring will be inevitable going forward, and your first employees need to be smart at what they do.
If you plan to build a company with great potential to succeed in the long-run, you’re going to need to cover these expenses before you think about paying yourself. And you should be very good at it, a lot of businesses have tried and failed.

+ There are no comments

Add yours

Leave a Reply