Want to get the most out of your startup budget? Here is a brief guide to help you to put your funds to good use by knowing when to skimp and when to splurge.
When to skimp
Most companies don’t need physical premises in the beginning. Office-based work can typically be carried out from home. Retail stores can meanwhile begin life as online stores and market stalls. By not investing in separate premises, you could save huge costs such as rent/mortgage, energy bills, extra equipment, maintenance and property taxes. Once you’ve established a brand and a steady revenue, it could then be a sensible idea to upgrade your premises.
A lot of start-ups also don’t need a huge team of employees. You may find that you’re able to save money at first by hiring part-time staff or by outsourcing roles rather than hiring full time employees. You certainly don’t need to be hiring assistant managers in the beginning.
Marketing is essential when launching a business, however you don’t need to pay a lot for it. In fact, a lot of initial marketing can be easily DIYed. When it comes to web design, consider creating your own site using a free website builder like WordPress – this could be all you need as a start-up. You can also do your own social media marketing and do your own networking without having to pay for professionals.
When to splurge
A lot of companies underspend on market research. Understanding your audience’s needs is vital as a startup and you should invest money into research strategies such as surveys and organised focus groups. This can help you to create a product/service that you know people are going to love.
As a startup, it can be a struggle to compete with more established companies. One way in which you can have the edge over these companies is by using the latest technology available – most established companies will still be using older tech out of convenience. It could be worth investing in start-up IT support to help you choose the best tech options. Cloud technology, analytics and smart technology are just three tech trends that are very hot at the moment and could be worth taking advantage of.
A lot of business owners make mistakes in the beginning that can lead to lawsuits. Consider investing in a general business insurance scheme that will cover you in the event of a claim. Some insurance is compulsory such as employer’s liability insurance if you’re planning to employ staff. Don’t skimp on these compulsory schemes.