Starting a business is expensive, and as you know if you’ve ever done it- you absolutely have to spend money to make money. But it’s all a balancing act especially in the early days, spend too much and you risk going bankrupt. Not enough and your services or products could suffer. The trick is to get it just right, and get yourself through that first tricky year of trading. Here are some ideas to bear in mind.
Start on a Smaller Scale
Instead of throwing everything you have into your venture and hoping that it does well, why not start on a smaller scale? You could start from home, or in a small office with fewer employees. Let it grow organically and that way you know that your business model works before you sink all of the cash you have into it and losing the lot if doesn’t do as well as you thought. Renting equipment instead of buying is another good way to keep your business small and avoid large upfront costs in the early days. Once you’re doing well, you can always buy this for yourself.
You might think that it’s larger and more established companies who outsource, and isn’t for your bootstrapped startup. However, it can actually be an excellent way to go about things when you don’t have much money upfront. You might have to pay the company, but it means you avoid having to pay and hire additional workers yourself, you don’t have to buy as much equipment or source materials. It can save you money on things like recruiting and training, which is a good saving as these can be very expensive. Again, later down the line you could always bring some of these departments in-house if you wanted to. You will need a bigger office for the extra staff with the equipment that everyone needs to do their job correctly.
When it comes to your business finances, your money needs to be in order. You have to make sure that exactly the right amount is being spent in each area, and that you aren’t overspending as this can lead to debt and trouble. You could either use business budgeting software, there are lots of different programs on the market. Or you could outsource and let a professional company take care of this for you, that way you can be sure everything is completely accurate. There are some accounting tips here; it’s something that needs to be properly taken care of in your business. Not only do you risk going bust if not, but come tax time you could end up in serious trouble if your finances are recorded wrong.
Search For Investors
One way you could raise cash up front is pitching to investors. If they like your idea, they will help you with the funds you need to set up to expand your business, but they can give you valuable advice too. This will be in return for a percentage of your business, your business, but it’s almost always worth it for the help they can give you.