Starting a new business can be one of the biggest investments of your life. Expenses often outweigh income when you’re just starting out—not only do you have the costs of equipment and any supplies needed, but legal fees and licensing fees need to be considered, as well.
With 30 percent of small businesses failing because they run out of money, learning where to cut costs when you’re starting out is vital to the growth of your business.
Use these ideas to find areas where you can spend less money and still operate effectively. You may find that you can easily save money and grow at the same time.
1. Cut Advertising Costs
Advertising no longer needs to eat up a large portion of your budget with the many online options available to small businesses. Any business, whether it’s service or product-based can use social media, email marketing, blogging, and more to reach their audience—the only resource required is time and knowledge.
As you look to put together a marketing plan, consider the following checklist:
- Start with your brand. In the age of social media, standing out requires a strong brand. There are lots of free guides out there to help you get started.
- Know your target audience inside and out. This will help you determine which platforms will be best for reaching them, I.E. Snapchat and Instagram or email marketing and direct mail marketing?
- Keep your marketing goal-oriented, and align all goals with your overarching business objectives. Marketing only works when you have a plan—this also allows you to track results and adjust as needed.
2. Reassess Health Insurance
Business owners need to have insurance to cover family medical expenses, as well as provide health insurance coverage to any full-time employees they may have. However, health insurance can take a large chunk of monthly expenses. As a business, you may have more options, so the best way to save is to work with an agent. HealthMarkets explains:
“By working with an agent, you have a knowledgeable insurance consultant to help you navigate the health insurance waters so you can focus on priority number one: running your company.”Another benefit: working with someone who knows the state’s regulatory landscape ensures that you make the best choice for employees, now and in the future.
Ask other business owners who they work with to find an agent who will help you save and make sure all of your bases are covered.
3. Downsize Your Office Space
The cost of maintaining an office space is another expense that you can easily reduce or eliminate, depending on your needs. If you find you need a physical space to meet with customers and use expensive office equipment, co-working spaces can provide you with the amenities you need for a lower rate. In a co-working space, you often have access to printers, scanners, conference rooms, presentation software and a full kitchen.
If you own an online, service-based business, consider cutting this cost all together and work out of your home. Home-based offices can provide a break on your taxes and give you the flexibility to help manage household tasks and family obligations, while still running a business successfully.
Don’t forget to check zoning regulations in your area to ensure that you’re able to operate your type of business from home.
4. Analyze Your Business Supplies and Equipment
It’s easy to over-anticipate what you’ll need when you’re in the planning stage of your business. Once underway, however, you may find that you don’t need an expensive printer or expensive software. Run through your office making a list of what you use regularly, sometimes, and never. Get rid of the “never” items and determine whether you can, for example, go to Staples to print on the off-chance you need to, rather than paying for a printer, paper, and ink.
MoneyCrashers also suggests saving money by buying the following used:
- Office technology, such as printers and copiers
- Personal technology, such as refurbished smartphones, tablets, and laptops
- Vehicles, such as delivery vans and company cars
- Storage equipment, such as liquid vats and bins
- Assembly and packaging equipment
- Glassware and cutlery
5. Cut Back on Costs
Running a new startup can be chaotic and trying—don’t make expenses any more stressful than they need to be. Use these simple tips to cut back on spending so you can concentrate on tasks that will promote and grow your business.
Jessica Thiefels is founder and CEO of Jessica Thiefels Consulting, an organic content marketing agency. She’s been writing for more than 10 years and has been featured in top publications like Forbes, Entrepreneur and Fast Company. She also regularly contributes to Virgin, Business Insider, Glassdoor, Score.org and more. Follow her on Twitter @JThiefels and connect on LinkedIn.