Everyone dreams of starting their own business and once you have taken the leap that first year can be both extremely rewarding and extremely exciting. It is a thrill after working for other people (sometimes for years) to suddenly be your own boss and be responsible for your own fate and career path. It is also rewarding to be able to sell your skills / products to the community and to deal with people as a business owner. It is also extremely scary, extremely tiring and often, extremely expensive. Starting and running your own business can require a great deal of money, certainly in the beginning and for a couple of years thereafter. The most common cause of failure of new small businesses is lack of sufficient funds to keep afloat and simultaneously, a mismanagement of the funds that they do have. That’s why it is essential for small businesses to be especially careful in how they watch the balance sheets and keep a check on all their expenses. This article will offer some tips on saving money as a small business owner:
Start Out Small and Build Slowly – This is the easiest way to keep the money-saving simple; by not spending any. Don’t aim to launch with a bang, but build slowly instead. Always make it a principle to only do what the business can afford and that way you will never get in trouble. Instead of hiring fancy web designers for your website, do it yourself. Instead of having fancy business cards done, do them yourself. Only buy stocks / supplies or new products for your business when the business is able to afford it.
Don’t Build a Fancy Office – You just don’t need it when you are starting out. A computer that is too powerful or a chair that is by a famous designer will not help you make any more sales or grow the business. Be prepared to kit out the whole office through garage and lawn sales if necessary.
Do Everything Yourself – As mentioned above, when you first start out avoid outsourcing jobs. You’ll get tired in the first couple of years but you will also save money. Don’t pay for an accountant when you can learn how to do the books. Don’t pay for a secretary or typist when you can handle it all yourself. And if you really find yourself needing an extra pair of hands:
Employ Some Interns – There are hundreds of willing and able college students out there who would be prepared to work for free or at a very low rate, so long as you are prepared to treat them fairly, give them some good experience and a reference. Place adverts at local colleges for marketing students to help you on marketing projects, accounting students to help with accountancy etc
Learn to Barter – Learning to trade services or products with other small businesses is an excellent way to save money. For example, if you are a website designer you could always design a new website for your accountant in return for them doing your taxes.
Learn to Negotiate – Running a small business means you are going to have to learn to haggle people down on prices. Whether it is talking to web designers, marketers, SEO teams or the banks it is always worth trying to push the price down. Businesses want your business and you would be amazed how many are willing to do deals in order to make you a customer (and particularly a customer who will come back again and again.
Where Possible Deal in Cash– As with managing your personal finances, if you avoid credit cards and use cash (but keep good records for tax purposes) you avoid the possibility of building up debts by mistake.
Esther is a financial journalist and business blogger based in Chicago. She writes about all areas of business and personal finance affecting the consumer from tax relief to credit and store cards and from consumer rights to where to find good commercial finance.