When people are setting up a business for the first time they tend to go way overboard in the beginning and this can cause problems further down the line. One of the biggest mistakes they make is spending too much capital because they think it will come in quickly, but when you run out of money you know what will happen. The trick is to start off on the cheap while keeping as much money in reserve as possible, so we’re going to look at a few good ways you can do it to prevent you from getting into trouble.
Do everything on your own
The biggest and most costly mistake people make when starting out is hiring staff too quickly. Sure, if you hire someone else to take care of all the small things you’ll be able to grow your business quicker, but you will end up with a lot of responsibility on your shoulders because you’ll need to pay people every month. Just do all the small things yourself when starting out until the people you hire will pay for themselves, because it might take you longer to grow the company but there is less chance of you running out of money.
Furnishing your office
Someone you know will have a few spare desks and a filing cabinet they don’t need any more. They will happily give them to you and you won’t need to spend lots of money furnishing your office. Even if you need to sit on a horrible chair in front of a crappy desk it’s still better having money in the bank you can spend on marketing. You can also do all the painting and decorating yourself instead of hiring a company to come in and do it for you as it should only take a few days to make it look presentable.
Choose your location wisely
Another consideration people don’t think about is the location of their office. This obviously won’t apply to anyone setting up shop in their own home, but you have a few things to think about when you’re renting somewhere. Go for the cheapest option available, but a number of factors need to be taken into account. Ideally you want somewhere close to where you live so you don’t need to waste a lot of money on gas and if you cut down on travel time you’ll also be able to work longer each day.
Buying your supplies
You will need supplies and you might go through a lot of them straight away, so it makes sense to buy in bulk because of two big reasons. The first one is the discount you’ll get when you buy anything in bulk, but another benefit is the fact you will have everything you need sitting there which means you won’t need to waste time ordering more of it. Try to be sensible and don’t order any more than a few months worth of supplies otherwise it will eat away into your cash flow.
Don’t buy what you don’t need
You might find you need certain equipment when starting your business, but don’t buy anything if you can acquire it through other means. Rent copier machines, printing presses, or anything else that will cost a lot of money upfront as you will have more money in the bank until you’re turning a good profit. Once you are finally making enough money you can go out and buy anything you want, but if you can rent what you need when getting started you will have less things to worry about.
Save as much as possible
We’ve talked about a few easy ways to save money, but that doesn’t mean you should stop trying to come up with your own ways to save as much as possible. You don’t want to get to the stage where you’re desperate for cash before you realize how important it is to have some tucked away for a rainy day.
