You’ve dreamed about it for years, and it’s finally becoming reality – your own business. While launching a business is exciting, it can also be extremely expensive. Frugality can be a lifesaver, especially in those early stages before your business becomes profitable. We offer four ways to help you keep costs down and be a frugal CEO.
Track your expenses
This may seem like a given, but being consciously aware of your expenses and monitoring cash flow is crucial for the survival of your business. Try to pay in cash when you can to avoid credit card debt, and save your business purchases receipts − many of these purchases are tax deductible.
This also includes knowing where your money is going. For example, legal fees can add up quickly for any business, especially startups. Be sure to establish expectations as you meet with lawyers and consider how you will be billed. It doesn’t hurt to ask about hourly rates, deferred payments or billing by project. This also applies to vendors and suppliers.
Outfit your (budget-friendly) office
Think about your return on investment when it comes to everything from office furniture to supplies. While the idea of large leather furniture sounds nice, it’s not essential. It’s simple to create a professional atmosphere with inexpensive furniture, whether it’s on sale or from budget-friendly stores.
Maybe you have more of a mobile business, like a lawn and landscaping company. You don’t have to purchase top-of-the-line, new equipment from the start. Slightly used equipment can work just as well. As you become profitable, you can save toward purchasing new equipment.
Depending on your type of business, co-working could also be an option. This involves renting shared work space that may include collaborative places, meeting rooms and Internet access. While it may not always offer maximum privacy, it will save the costs of an office set-up and can be much more affordable than renting retail space. You can use websites and apps like Desktime to help locate shared spaces in your area.
Save on travel
Saving on travel costs can be as simple as staying at less expensive hotels. Also consider client meetings; do these meetings need to take place in-person, or could you meet via a video conference? Videoconferencing services like Skype or WebEx offer affordable monthly rates and allow you to virtually connect with stakeholders and clients. Virtual meetings can save you the costs of airfare, hotel, rental car and gas. If you do need to meet face-to-face with a client, have clear objectives to maximize your time and costs of the meeting.
Finally, your staffing will most likely be limited in the early stages of your business. Only hire help if you absolutely need it. Leverage the talents of others by offering internships for college students, or try crowdsourcing. Crowdsourcing is a process of acquiring needed ideas, services or content by gathering insights and contributions from a large group of people, especially online communities, rather than from employees or suppliers. Big companies like Coca-Cola and GE actively engage in crowdsourcing in order to solve problems, and develop and launch products. You can collect input via social networks, online forums or focus groups at little to no cost.
We wish you the best with your new business. As you build it, pinch those pennies, and you’ll see the payoff!