Starting a new business venture is tough. Spending money in the right places is important, but cutting costs wherever you can is vital. Let’s take a look at how you can trim your outgoings and ensure your startup can focus on the essentials.

1. Don’t hire until you have to. There are two sides to consider when hiring staff. On the one hand, a good team is worth investing in and will pay for itself. There will be skills that you need to make your business happen. That could mean a developer, a specialised sales force or a designer – anything that is going to add value. Check out our article here to find out how to employ the best people for your startup.

On the flip-side, hiring staff will one of the highest costs of your business. It is vital that you don’t consider employing a big team until it is necessary and grow your workforce at a sustainable rate. Crowd-sourcing work is a good option here, as is hiring an intern; particularly for things like early stage marketing. One thing to bear in mind is that your product or service is the most important thing to concentrate on. Don’t spend money on marketing or getting the word out until you are close to launch.

2. Cut your rent & rates. Put those dreams of a flash office decked out in comfy sofas and exotic fish tanks on hold for a moment. If you are still developing an idea and aren’t making money, it makes little sense to be forking out huge rent and rates. Work from home and you will be able to reclaim a proportion of your mortgage interest, rent, heating, and repairs in tax.

Shared workspaces are also worth considering and are much cheaper than renting an office. A simple hot desk shared with other startups is a great way of forging new relationships. You will also find that there is a lot of creative sharing and support in these places.

3. Lease car, don’t buy yet. If your startup requires a vehicle, it’s worth thinking about leasing a car instead of buying one outright. Leasing a car will give cheaper monthly payments and cut your outgoings in that important initial phase.

Take a look at these Honda business leasing deals to give yourself an idea of what to expect. If you do decide to lease, make sure you are aware of all the terms and conditions. This will help you avoid any surprise charges and help you plan better for the duration of the lease..

4. Why not second-hand everything. Scouring the second-hand markets for equipment can save you a serious amount of cash in the early stages of your startup. Desks, computers, office hardware, and everything else can be a big outlay if you don’t have much money.

You may even be able to pick up free stuff, so check your local Freecycle pages and see what’s available. People often just want rid of things quickly so if you can pick them up yourself, you could find yourself kitting out an office for no cost.

5. Get a startup grant. One thing you need to consider about startup grants is that they can take up a lot of your time. The application processes tend to be long and drawn out, so it is important to ensure you are applying for a grant that you are eligible for.

There are so many grants available for fledgling businesses, but many people don’t know where to start looking. Check out the Startup Britain website; it’s a great resource for beginners.

6. Use open source software. Business software can be expensive, but is it necessary? Open source software is free to use and can work just as well for you. For example, instead of buying a business copy of Microsoft’s Word package, just use the open source Open Office. Instead of buying Photoshop, use GIMP or Inkscape.

There is no point spending money if you don’t have to, and even these small savings can make a big difference when combined. It will give you the opportunity to invest your money in areas that are essential to getting your new business off the ground.

7. Monitor everything. Every penny counts when you are a startup, so make sure you know where every one is going. Keep a record of expenditure and refer to it often. It will help you identify areas where your money is wasted.

It’s easier than you think to keep on top of your finances. Take Mentio’s accounting app, for example. It helps you manage expenses, track payments and suggests ways of fixing your problems. You can also access it at any time, so is perfect if you are out and about drumming up business.

8. Learn to negotiate. Negotiation is a tough skill to learn, but as a startup you will need it. Lots of companies offer special discounts to small businesses, and there are plenty of good deals out there. Never, ever hit the Pay Now button without trying to barter for a better price first.

Try negotiating for better deals on small things first, like your phone contract. Once you have had a few minor wins, your confidence will soar. Pretty soon you will be trying your luck with everything from office rent to vehicle hire – and you will be getting the best price you can for almost everything.

9. Get an accountant. Many startups do their own accounts, but for a small monthly payment you will get better value from hiring a good accountant. They will save you money from places you never considered. They will give you valuable business advice. They will lower your tax bill. In short, they are worth every single penny.

But when you are just starting out there is no need to fork out big bucks for an accountant. Look for a smaller, local firm, or even a sole trader. They will give you a good service without the chunky price tag. They will also be able to tailor to your requirements, and offer you a far more personalised service.

Image courtesy Hernan Pinera/Flickr