While the level of business investment in the UK fell by 1.5% during the last 12 months, the International Monetary Fund (IMF) have upgraded the forecast for growth in the region. This is positive and unexpected news, which is likely to resonate with new start-ups and entrepreneurs who are keen to establish a brand new venture.
While the economy may have showcased robust growth and resilience in recent times, however, there remains considerable uncertainty and volatility surrounding Brexit.
This means that startups must still strive to minimise costs and adopt a lean business model in the current climate, at least if they are to optimise profitability over time. So, how exactly can you look to minimise your business overheads without impacting on performance? Let’s find out: –
Avoid the commercial property trap and long-term leases
One of the main issues for startups is that they can quickly become encumbered with long-term debt, particularly when you consider the nature of assets such as commercial property.
Long-term leases are costly to procure and, more importantly, terminate, meaning that businesses can often be left with expensive and unsuitable properties that do not allow for organic growth.
Fortunately, the contemporary market is blessed with a number of alternative options for lean and independent start-ups, many of which offer huge financial advantages.
Take serviced office space, for example, which is available through outlets such as BE Offices and enables tenants to first class facilities in central locations. These offices can be sourced on short-term leases, however, while you can also expand or decrease the space required according to your needs.
Virtual offices are an extension of this theme, as they empower your business with a prestigious post code without incurring overheads (which is ideal for firms in the financial sector who are looking to build trust). Retail start-ups can also invest in temporary structures and pop-up outlets, which can be placed anywhere and leased on a rolling, monthly contract.
Embrace the global workforce
The idea of flexibility and adaptability can also be applied to recruitment, as you look to restructure your workforce and maximise its cost-effectiveness. This is easier than ever in an age of remote communication, where the geographic barriers that once separated individuals across the globe are no longer in place.
So while your business should still maintain a core, full-time workforce to manages its strategic development, there is ample opportunity for startups to employ temporary and contract-based workers to complete short-term projects.
After all, it is now possible to engage and interact with a global pool of talent online, meaning that you can employ talented and skilled employees without committing to hefty, annual salaries.
Such an approach not only enables you to build and adapt your workforce depending on the demands of each individual project, but it also lets you minimise annual costs and increase efficiency.
Invest time into developing partnerships with local businesses
On a final note, it is always wise to consider reducing operational costs when launching your venture. This is because such costs relate to tasks that do not have a direct impact on your bottom line profit, as opposed to more strategic disciplines such as marketing, sales and customer service.
One of the best ways to reduce operational costs is to develop partnerships with local businesses and service providers. The nature of these partnerships will depend largely on the business and the value that it can offer to others, but the general idea is that you are able to cut costs and optimise efficiency without impacting negatively on your output.
If you intend to open a local SEO and digital marketing agency, for example, you have a viable and clearly-defined proposition that can benefit small businesses in the region. You can then market this at a discounted rate to potential clients, in exchange for services that can enable your own venture to grow.
From discounted printing to reduced cost hardware, it is possible to leverage your own products or services in a bid to slash operational costs and build strategic partnerships for the future.