Save Money in the First Year of Business Without Breaking the Piggy Bank

So, you’ve found your dream business and you’re ready to get started. You have all the skills you need to get going and your prospects for the future look bright. There’s only one thing standing in your way — money. The first year of business is renowned for being financially tough and many first-time business owners won’t take home much of a wage until the business is established. However, there are few ways you can save money during your first year if you’re on a tight budget. Here’s how you can do it.

Bartering

As a new business, there will be plenty of things you need. You’ll need to make connections with suppliers, whether they’re supplying your products at cost price or just filling up your cabinets with stationery.

There will be a few businesses that are willing to barter if you have something you can offer in return. That way, you won’t be spending your profits on supplies, so you’ll have a much bigger budget for advertising and marketing. Here are another 4 simple business methods to make your life easier.

Hiring Staff

In the first year of business, the last thing you need is to be paying out wages that are unnecessary. So, if you can do the job yourself instead of hiring someone else to do it, you’ll save yourself a lot of money. If you find you can’t do without the staff, consider advertising volunteer or apprentice positions.

That way, you keep your costs down and your staff gain valuable experience in the industry and what it takes to build a business from scratch. If you need to hire staff with specific skills, like graphic designers or content writers for your website, consider outsourcing the work instead of hiring a permanent member of staff.

That way, you’re only paying for services when you really need them.

Buy in Bulk

When you initially start a business, there will be lots of things you’ll need to use constantly, like paper and printer ink. The last thing you want to find is that you’ve run out of these vital items while you’re trying to work. You can often save money by buying these items in bulk from warehouses and storing them away until they’re needed. In the long run, in makes more financial sense than buying items as and when you run out.

Work Online

You don’t need a fancy office to start a business these days. In fact, most of the time all you need is a laptop and an internet connection. You can save a lot of money by opening an online business and there are often few start-up costs.

For example, becoming a freelance writer doesn’t require much financial input; just a lot of time and patience. By setting up a business online, you can work anywhere you want — from home, the local coffee shop, in a hotel room. Many WiFi connections are free, and you can often claim tax back on your home internet connection.

However you choose to save during your first year, you can be sure it will help your business to flourish.

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Making Time to Relax

Your company is on its feet, you have done all the right thing, maybe some wrong things, but it’s all paid off, and you are a bonafide business owner well done you! This is the point where you thought you’d be able to take a breathe and relax for a bit, but it doesn’t seem possible, right? The jobs are still piling in, and the to-do list is growing longer, not shorter.

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Image Credit: Pexels

You built your business because you loved it so don’t let it take over your life and cause you so much stress. We work so that we can enjoy life if we enjoy work too then it’s a massive plus! Just don’t let something you love turn into something that ruins your day.

Here are the main things that are preventing you from taking that breather and how to fix it so that you can.

Finances

The money-flow is always going to be a stressful situation – until you make your millions, of course but until then, the pennies need to be watched and seeing as it’s your money, you feel responsible. Money is the biggest stress-causer, but it doesn’t have to be.

Delegate the role of the financier to an employee; hire an accountant or a bookkeeper, or even outsource the work. You’ll get the lovely organised report and won’t have to balance the books yourself.

Hiring

Finding the right person for the job doesn’t have to be your problem. In your small business, it’s always a good idea to have the final say in any new employee, but the legwork of finding the candidates doesn’t have to be you. Executive search companies can hunt down the right man (or woman) for the job, taking that stress off your shoulders.

This work especially well if your business is growing quickly you don’t want to spend all your energy finding people when you need to be focused on the growth of your company.

The To-Do List

Again, delegate! Look through your list and see which tasks can be done by someone else, and once those have been identified, rank your jobs in order of importance. And, if you can, set a date to complete them on. Organising any tasks or projects allows you time to plan around them, and a smaller list of three or four tasks a day is a lot less daunting than one of fifty.

Work/Life Balance

The average business owner struggles to find that balance between work and their private life and can become ill from doing so. Hopefully, by uncluttering your business life, the chance to slow down and take some time off presents itself.

Here are some ideas to make a separation between your two worlds; turn your phone off at a certain time every evening, and let your employees know. Have an emergency way of being contacted, but give yourself time for you and your family. Take a holiday your employees get to, and so do you. Have a second in command who you can trust to run the place if you’re away or ill.

Unnecessary Costs of Starting a Business

There are plenty of costs involved when starting a business (hiring people, office rental, energy costs, etc.) with the average start-up cost coming in at around $30,000. On the flip-side, micro-businesses can be kick-started at approximately $3,000 or less.

While many initial costs are necessary, it’s fair to say that many are, in fact, a wasteful investment. And, given that cash flow and investment is all-important at the early startup stage, it makes sense for new businesses to avoid unnecessary expenses and eliminate them entirely.

At first glance some of these costs may appear to be minimal, when you add them all up, you could arrive at a significant amount of money. Which, of course, could be much better invested elsewhere, and provide you with a stronger foundation for success.

Here are four things to consider that can help you reduce any unnecessary costs of starting a business.

Hire flexible people

If you can avoid hiring people for as long as possible, it’s advisable.

Ultimately, as your business grows you’ll have to consider taking on people (employees) to give you a helping hand — just be strategic and selective with the personalities you hire. Your startup should be looking for very specific types of individuals in its early stages.

You need employees with multiple skill sets and the ability to help you out with various tasks in a variety of areas (maybe social media and sales generation).

Naturally as you begin to make more money, you can hire people for specific roles and define the role of existing employees. But in the early stages, flexible people are key.

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Don’t rent an office straight away

Room rental and rates will cost you money you can’t afford as a startup. It makes no sense to spend all that cash on an office when there are so many other options to consider.

For example, the go-to is working from a home office to save on rent altogether. Or you might visit The Hoxton Mix or a similar co-working space in your area to rent a cheap desk — or just use as a virtual address. Coffee franchises like Starbucks, have become quite popular as daily work areas for “solopreneurs”. I written a few articles for Virgin.com from there.

And there maybe other small businesses in your area who would be willing to rent out a single desk for you to work on your business, for a much lower market rate than you would find anywhere else.

Watch your energy usage

Wherever your business is, make sure that you are keeping on top of your energy bills. Even the simple act of turning off a light when you leave a room can help you save a significant sum of money over your first year.

And if you apply the same efficiency principles to every other electrical device, you will find those savings start to multiply by a huge amount.

Trade in your expensive analog phone line and use smartphone or laptop with services like Skype and Google Hangouts instead. With more people getting used to contacting businesses online, phone lines are an unnecessary initial cost.

It’s also important to factor in your energy usage into your quotation and invoice, particularly if you’re providing a service like web design, application development, graphic design, interior design, writing, editing, and just anything else that requires you using software to create a product. This will help you recoup some of the costs.

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Paying and being paid

A final point — never forget the importance of cash flow to your business. You always want to be cash flow positive. It will save you from significant debt over your first couple of years.

Try and collect any monies owed as quickly as possible, while holding on to your own payments for as long as possible. It’s imperative that you invoice your clients to get paid on-time.

Set-up lines of credit if necessary, as you will often find that the interest rates involved are much lower than you will find on a credit card.

But, all things considered, it’s always best to bootstrap your company by growing at a steady pace and reinvesting your earnings.