Starting a business can be professionally and personally fulfilling, giving you a path to make significant income and establish more autonomy over your work. However, it’s expensive to get up and running. Many businesses can launch with less than $10,000 of initial funding, but even then, you’ll need to find a way to stay afloat until you can start generating enough revenue to make up for all your operating expenses.
If you’re trying to operate on a razor-thin budget, or if you just want to remain as lean as possible, it’s important to cut startup and initial operation expenses. How can you do it without jeopardizing the structure of your business?
How to Save Money On Business Expenses
These are some of the best ways to save money on the most common business expenses:
- Go remote: You probably don’t need much help figuring this one out, considering how much the world has shifted to remote work. There are still some lingering concerns about working remotely and employee productivity, but don’t let that stop you; for many businesses, the remote model is not only more cost-effective, it’s also more productive. While you’re at it, consider going paperless. If your business can operate exclusively in the digital realm, you’ll end up saving thousands of dollars per month, and you’ll expand your capabilities at the same time.
- Lease instead of buying: If you have any major equipment to acquire for your business, consider leasing instead of buying it outright. Leasing means you’ll sacrifice a few advantages (such as having full control over your assets), but you’ll typically end up paying far less up front, and you could end up saving money in the long term as well.
- Always ask for discounts: Next, always look for discounts on the products and services you’re paying for. One of the easiest ways to do this is to look for discount codes on the things you buy online; you’d be amazed at how much you can save with this step. If there aren’t any discount codes, or if you’re working with a provider directly, consider asking for a discount and negotiating a better rate. Sometimes, just asking for a lower price is all it takes to get one.
- Bundle services and buy in bulk: You should also try to bundle services and buy in bulk, if given the opportunity. Most companies are willing to provide a lower per-unit price to people who buy a greater quantity, since they can incentivize bigger purchases and ultimately make more profit. Ask if there are any bulk discounts or bundles available.
- Minimize your staffing. Payroll is going to be one of your biggest expenses when starting a business, but there’s no reason to let this get out of control. Many entrepreneurs, especially new ones, are tempted to hire robust teams from the outset, but if you can get by with a skeleton crew, try to minimize your hires. If you need extra support beyond your full-time team, consider enlisting the help of contractors and outsourcing.
- Avoid traditional marketing and advertising: Your business needs marketing and advertising to increase visibility and attract more customers. That doesn’t mean you have to spend tens of thousands of dollars to do it. Alternative marketing strategies, like search engine optimization (SEO), social media marketing, and guerrilla marketing can help you boost brand awareness inexpensively, keeping your approach lean and effective.
- Rely on open-source software: You could pay hundreds, or even thousands of dollars per month for the core software your business needs, or you could choose an open-source alternative for free. There are some risks and downsides to open-source software, but it’s a viable option for many applications and most businesses.
- Barter with other businesses: Why pay for something when you could simply barter for it? Small business owners and new entrepreneurs are probably more than happy to negotiate a trade with you if you can’t afford to pay for their services outright. It could end up being a mutually valuable opportunity if you work together.
Finding the Balance
Reducing expenses can improve your bottom line and help your company become more financially sustainable, even in the long term. You also don’t want to rob yourself of the necessary infrastructure or support that your business needs to do well. For every business and every entrepreneur, the balance is going to look slightly different. Carefully evaluate your needs before you start making any major decisions.