Matching the financial implications of your startup to your expectations from the get-go doesn’t always line up as you imagined it would! To be successful, you need to focus on saving money during your first year of business while spending it according to proper financial planning. Only then can you expect your startup to be viable from the beginning of your venture? Find out how you can save money when starting your business with these five tips.
1. Write Down Your Financial Planning
One of the most common pitfalls for startups failing within a few months of trading is improper financial planning. Successful entrepreneurs spend time putting together a financial plan that:
- Forecast expenses for the first year of business
- Highlight areas for reducing costs
Not only should you focus on your financial planning in advance, but you should write it down. Putting it down on paper prepares you from the beginning of your venture to make quick decisions when necessary and to save money in your first year. Working with a written budget allows startup owners to reduce costs and build capital from the beginning.
2. Network Before You Launch Your Startup
Networking and building a solid customer base can be done before you launch your startup. As soon as you build your new business, focus on growing your network. Every person you meet and engage with can turn into a potential client. Use free online platforms to reach a broader market and prepare your target audience for the launch of your venture.
Building relationships with other startups, entrepreneurs, and small business communities gives you access to invaluable information. Networking with like-minded individuals who have been there can help support the financial health of your new venture from the start. They can tell you what costly pitfalls to look out for and how to save money while growing your startup.
3. Get Organized With Collaboration Tools
If your startup includes other co-founders and employees, using a collaboration tool could save you loads of time and money. Spike is a platform that focuses on creating tools and apps that equip you and your team to be efficient. What are the other advantages of using this collaboration tool?
- Improved communications: All team chats, emails, and meetings are unified in one place, reducing distractions and improving communication.
- Streamlined workflow: Keeps the workplace organized for fast and efficient productivity.
- Seamless communication: Engagement with business partners, colleagues, contractors, and clients all in one space.
Using a collaboration tool gets your business organized from the beginning while boosting your savings and improving your bottom line in the early days. Instead of wasting time moving between different apps to communicate and get the job done, you can stick with one tool that’s productive, super-fast, and easy to use.
4. Use Cost-Effective Marketing Strategies
Marketing your startup can be expensive if you don’t consider cost-effective strategies in the early days of running your new business. While promoting your new venture is essential to attract customers, pouring money into advertising doesn’t always guarantee increased sales. However, using the right marketing platforms can boost your revenue.
Successful small business owners advise startups to spend no more than 5% to 8% of their total budget on marketing costs during the first year of trading. Increase sales in the first year by optimizing the following channels without spending too much on marketing:
- Your website
- Social media platforms
- Email campaigns
Offering discounts, complimentary vouchers, and rewards programs are other cost-effective ways of saving on marketing costs while growing your customer base.
5. Eliminate Business and Personal Debts
Taking out a business loan in the early days of your venture should be avoided, but sometimes it’s unavoidable. A well-thought-out financial plan will help you manage the loan while paying it off as soon as possible. Eliminating business debts as soon as possible lets you save your hard-earned money faster while building interest.
Getting rid of personal debts before launching your startup will free you up financially in the early days of trading. Paying off your credit cards, outstanding personal loans, and store accounts allows you to save money for your business from the beginning of your venture.
Building capital well before launching your startup gives you the headstart you need to get through the first months of your new venture. However, implementing saving strategies in the early days of trading and throughout the first year of business ensures your startup is sustainable from the beginning.