Every business, regardless of whether it is a brick and mortar store, service provider or even an online store must incur expenses to some extent. So, expenses are part and parcel of the day-to-day running of a business enterprise. Whereas a business owner cannot avoid these expenses, they can put some measure in place to reduce them.
There is no doubt that for a start-up business, there is the need to keep expenses to their minimum. If the costs of running a start-up are very high, then the business may soon close its doors. That is why it is important for every new entrepreneur to learn new trick that will help to keep his business afloat amidst the harsh competition from the already established businesses.
1. Reduce on cost of rent
One of the challenges facing start-ups with physical stores is the cost of renting business premises. Unlike established businesses, start-ups are over stretched in terms of resources and therefore there is the need to use available resources prudently. One of the main tricks would be to manage the office space such that every space is utilized well.
This would call for removal of any equipment and materials that are not being used by the business. If the office space is neatly arranged, it can accommodate more people and save on rent costs. The biggest benefit with start-ups is that they operate with their own rules. A start up can have some their employees work from home and contractors to work from their offices to eliminate and minimize on the cost to rent an office space.
2. Outsourcing services
As the business grows, its needs increases and therefore the need to have permanent staff who can help in running the business. However, during the start-up phase, there is the need to hire freelancers and contractors for short term jobs. Freelancers and contractors are flexible and affordable since they can work from home and they have little budgetary commitment.
Permanent staffs are also important to a business but they require a lot of investment in management, trainings, benefits packages and a lot more. Start-up ventures should balance their needs for permanent employees and freelancers. The management should be able to establish the job they can do on their own and those that need outsourcing. A start up can outsource various services that include Human resource administration, payroll, accounting, and marketing.
3. Supplies and equipment
Start-up businesses can significantly reduce their operating cost by reducing their budget on supplies and equipment, print less and hire equipment when necessary. Small items such as stationary, ink cartridges, file cabinets and papers end up increasing the running cost of an enterprise. A start-up venture should therefore consider sourcing office equipment suppliers online, as they are usually a cheaper alternative than shopping for these supplies at physical stores, for the reason they do not have as many overhead costs such as store rent and human resources.
It is advisable to for a start-up venture to store most of their documents in soft copy so that they can save on space. Scan documents when necessary and store them in the hard drive rather than pile files in cabinets. But be sure to back-up your files and protect your systems from hackers by installing passwords and anti-virus software.
4. Source for affordable utility providers
There is no doubt that utility bills such as electricity, water, internet and telephone services can increase the running costs of a business if they are not used prudently. The most important thing is to review all the utility bills and cut costs whenever necessary.
If your internet costs are high, you can look out for affordable bundles that will help the business to keep some change. Also ensure that the business uses energy efficient devices that consume less power. The entrepreneur should also look out for affordable telephone service providers.
5. Negotiate lower prices from various vendors
A good business person should have great negotiation skills. Many small business owners travel a lot while seeking for new market opportunities. If you are high transport and accommodation rates, then you should consider looking out for travel agencies that are offering discounts and sign up with them.
Many of the small business owners use credit cards for their working capital, to cater for minor purchases and also for travel and accommodation expenses. If your service provider charges high percentage rate, try to negotiate for lower rates with them.