Not all startups are blessed with an angel investor while most are begun with personal funding. This can make money a bit tight which can lead to small stuff numbers meaning these employees need to be extremely efficient and talented in a variety of areas. A tight budget can make for some tough decisions on where the budget should be allocated.
Everyone is going to have a different opinion but until the company is profitable the money cannot be allocated everywhere as it will be spread too thin. Most of the time it is imperative for the company to spend the money in areas that will make them more profitable so later they can allocate money to other areas. The following are tips to allocate budget for a startup where funding is tight.
Digital marketing does not have to be expensive
Digital marketing does not have to be expensive as there are a variety of freelancers available on different platforms. These freelancers can do everything from design a website to writing the copy for the sales page. Hiring an agency can help increase the odds of success but certain digital marketing agencies overcharge for what they are actually doing.
Office space should be as big as you need, not as you want
TheMoneyAlert.com notes that putting too much money into monthly office rental can cripple the business in other areas. A big office is nice but with a smaller budget, the office just needs to be practical. Do not rent an office for the staff that you are hoping to have but rather the staff that you have right now.
The office can be even smaller if you allow certain employees to work remotely as some jobs do not require the presence of a person in the office. There are certain jobs where working from home reduces distractions and the employee can actually be more productive.
Never skimp on equipment that impacts the quality of work
The one thing to never skimp on is equipment that will impact the quality of work that the startup is producing. A printing company is going to need the best printers on the market as well as high-resolution monitors for designers to work on. If running a publication an editor can have a basic computer as this will not impact their quality of writing. Make sure that when you are cutting costs that you do not cut costs in an area that will negatively impact work delivered to clients.
Don’t hire more, optimize processes
While a startup is small it is time to perfect certain processes rather than watch processes that are not scalable fail once they are put to the test. This means that you are going to have to automate as much as possible as this gives employees more time to do the job that they are paid to do. Hiring too many people can lead to a lack of cash flow and you need to make sure your current employees are too busy to handle more work as well. At startups with small budgets wasting time is not an option as it can end up with the company closing.
As you can see allocating budget is not going to be simple but writing it out will help make it clear where the money should be going. Good luck with getting the best ROI for your budget!