Do you want to reduce your startup costs and maximize your profits? The less you spend on initial business costs, the more you can enjoy high profits in your startup business. Reducing costs can benefit your business in many ways. By reducing extra expenses means you can increase your startup working capital. You can also allocate these funds into other business operations. Well, here are the 10 simple tips to reduce your startup costs.
#1 Set your Priorities w.r.t Expenses
Take a pen and simple page. Write down all the costs and expenses that seem to be required to get started. Now, make a table and categorize your startup costs from important to less important. Some costs/expenses you may find as less important. So, you can mark these expenses as deferred costs. In this way, you can utilize these funds in other business operations.
#2 Purchase Second Hand Office Furniture and Equipments
If you are going to launch a startup business then you can save your dollars by purchasing second hand office materials or equipments. All you need to check the functionality of equipments and materials, whether it can be usable for business or not.
#3 Negotiate Prices
Negotiation is considered to be an important skill for business. Whenever you make purchases for your startup business, always negotiate prices with your suppliers/vendors and try to reduce costs as much as you can.
#4 Make Deferred Payments
You should implement deferred payment system in your small business. Whenever you buy goods/services from vendors, try to convince them and make deferred payments i.e. payment will be made after 30 days of delivery.
#5 Avail Discount Opportunities
To increase sales, some businesses usually offer discounts on their commodities i.e. 2% (n/30) etc. You can also reduce your initial business expenses by purchasing goods/services at discounted rates.
#6 Ask for Trials
Some new startup businesses usually offer goods/services trial in market to increase their customer base. Whenever you receive these types of opportunities, don’t let them go. Ask for trials i.e. 6 months or one year and reduce your startup costs.
#7 Share your Office Space
If you are worried about monthly rental expenses then you can easily overcome this issue by sharing your office space with other small businesses. Sharing your office space will also expand your business relationships with other businesses and it will surely benefit your business in future.
#8 Reduce Communication Expenses
Nowadays, internet is considered to be a great tool to communicate with each other. You can reduce your monthly communication expenses by the use of internet. Instead of using telephone, communicate with your suppliers and customers by using Skype. Use free email services like Gmail, Outlook and Yahoo. Whatsapp, Imo and Viber are also awesome communication tools to quickly interact with customers and suppliers.
#9 Hire Internees
Starting a small business means you have to hire some employees to manage your business operations effectively. But hiring full time employees can cost you much. In order to get your business work done, you can offer internships to fresh college graduates who are seeking internships for experience. Hire them and get your work done at low cost. Normally, stipends are paid to college graduates when they work as internees.
#10 Reduce Costs by Lease Vs Acquisition Analysis
In initial stages, small businesses often face financial problems. They have to allocate their funds very carefully in order to run their startup operations. But sometimes, small business owners get confused while making decisions about acquisitions or leasing of equipments. With respect to startup costs, both options have its pros and cons. To overcome this confusion, you can do lease Vs buying analysis and reduce your initial expenses.
Wrapping Up
There can be lot of other ways available through which startup costs can be reduced such as hiring freelancers through freelance websites, using social media platforms to reduce marketing expenses, affiliate marketing and outsourcing accountancy services. The nature of one business varies from other businesses. So, it all depends on you that which costs/expenses you mark as important and less important. Now, it’s your turn. Let me know in comment box, how did you reduced your startup costs and make your business profitable.
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About the Author
Adil Zaman is a freelance writer, business major and founder of Fincyte. He loves to write on Small Business and Tech Trends.
Twitter:- @adil732
