If you’re currently in start-up mode, one of the biggest challenges you’re likely having to tackle on a daily basis is the inconvenience of having to be particularly frugal with your funds. It’s all very well once startups gain traction and venture capitalist’s come in with their colossal lines of credit, but if you’re not currently at that place or are running a small business that isn’t likely to need or want to see the inside of a VC’s boardroom, there’s a need to be frugal with your funds.
In that spirit, here are three ways entrepreneur’s in startup mode can save money.
1. Launch from home
A common mistake that many founders make is to straight away go out and secure premises, be that a fancy office, warehouse or cool creative community – they want to look the part, feel the part, and have an address that positions them as a respectable company.
It’s an understandable feeling and there are clear commercial benefits to having professional premises with a well-reputed address, yet this isn’t as necessary as many people feel it is and can put a huge strain on your start-up budget.
Indeed, many businesses find it charming to visit startup companies in somewhat grungy premises as there’s a raw charm that cuts through the corporate blandness they are subjected to on a daily basis.
Of course, your premises do need to be fit for purpose but there’s no need to go out and acquire swanky premises. If you’re launching a food company that requires a commercial kitchen, ask yourself if you actually need a commercial kitchen or could you start out from your home kitchen, perhaps with a few extra freezers stored in your garage.
Furthermore, if you do require a commercial kitchen, consider speaking to local catering colleges that have professional facilities not being utilized during the evenings, early mornings and school holidays.
Then, if you’re a tech startup, why not launch from home – or even rent a house somewhere like India, Thailand or the Philippines for a few months (where the rent and cost of labour is particularly low) and create a basecamp from which you launch your business.
The point is, there’s always a cheaper alternative to going out and getting swanky premises that you think will impress clients, but the money could be so much better utilised, and most clients will find it endearing to see the frugality and authenticity of your start-up phase.
2. Be energy efficient
Apart from the clear environmental benefits of intelligent energy usage, there are enormous cost savings to be found too; from tax breaks on energy-efficient vehicles to simply cheaper utility bills.
3. Stop trying to impress
It’s very easy, particularly with young entrepreneur’s to feel the need to impress other business people with symbols of success such as pulling up in a fancy car or signing a contract with a Mont Blanc pen.
The truth is, people want to do business with you for one reason and one reason alone – they are interested in the value you create and the problem you solve. All that puffery might serve your ego but it doesn’t necessarily serve your business.
Sometimes it can be important to make a good impression, and it’s understandable that entrepreneurs often hold meetings in the lounge of a five star hotel rather than a McDonald’s, but try to keep things in perspective and realise that you don’t need to be something you’re not in order to earn someone’s respect or business. Indeed, the best way to do that is to focus on the value your product, service or solution brings your customer.