When you launch a new company, it is easy to allow costs to spiral out of control. Before you know it, the business is in trouble and at risk of failing. Although there are some aspects of a new venture that are outside your control, business costs can be limited with a little planning.
Obtaining cheap finance
Unless you have personal savings you are prepared to invest in your venture, you may need to borrow finance. Although you may be considering the traditional route of a bank, consider whether an alternative source may be a cheaper option.
Initially, consider whether you could borrow from friends or family members, with a low rate of interest. If you don’t require a large amount of money, consider a micro loan, which normally has decent repayment terms. Angel investors are another popular option. In return for a share of your company, business angels will offer investment combined with the benefit of their experience as an entrepreneur. Avoid credit cards and overdrafts, as they tend to be far more expensive than typical loan rates.
Do you need business premises?
A number of start-ups make the decision to run their company from their home during the initial stages. Business premises are often the largest overhead for a company. If you have a spare room to turn into an office, consider this as a viable option. If you believe you require an office that is in commercial premises, consider a serviced office. Although the business premises are important, especially if clients are expected to visit, there are alternatives to expensive office space.
Building a workforce
If you require employees, there are many options to consider before hiring a full-time workforce. A permanent employee will increase administration for the business, increasing costs. Consider hiring freelancers to undertake some of the duties. This allows you to hire someone only when they are required. Another option is to outsource some of the more specialised tasks to a professional. Outsourced accounting is a cost-effective method employed by many businesses to maintain an efficient company. You will benefit from the expertise of the professionals, while saving valuable resources.
Cost of equipment
Rather than buy the most expensive furniture and equipment, buy only what you need and compare prices carefully. Lease or rent equipment if possible, or look for pre-owned items that have hardly been used.
Keeping a close eye on finances when you start your new venture could prevent problems at a later date. Contact us for more tips to reduce start-up costs.