When starting a new business there will always be obstacles in your path and little annoyances that you must deal with, sometimes on a daily basis. Actually, if a statistical analysis were to be made, one of the leading problems that confront many startups is in having enough money to do all that needs to be done to get the company off the ground.
The best way to confront this issue would be to control spending. With more money to ‘float’ you can get so much more done and your startup will be up and running before you know it. Take time to think about this critical advice for startups. These five ways to control spending should free up more money to use as you need it along the way.
What you will read in this article:
1. Establish a Core Focus of Must Have Expenditures
Before you can actually control spending, it is important to differentiate between your ‘must have’ expenditures and those things that would be nice but aren’t critical to your success. If there is money left to spend when all the ‘must haves’ are met, fine. If not, those items can be revisited at a later date when you’ve had a chance to grow your bottom line.
2. Set a Budget and Stick to It
The next thing you should do is tally the projected costs of your necessary expenditures. This will include costs involved in production as well as the costs of actually running your business. After itemising your list of expenses and tallying the figures, you can set a budget going forward. At this point it is essential to stay within the limits you have set for your company.
3. Utilise Technology to Keep Spending within Limits
One of the amazing innovations this century is in having technology that can control your spending. Cloud-based software is available from Claritum.com that lets you set parameters on what you can afford and then the software literally automates the buying process. Continual searches for the materials you need will keep costs updated in real time.
You can set controls as to the price per item your company can afford and the cloud-based software does the rest. Now you can spend exactly what you can afford without hundreds of manpower hours manually searching for products and suppliers that have what you need at a cost you can afford.
4. Reduce or Eliminate Waste
When first starting out there is bound to be a certain amount of waste due to trial and error. This type of waste probably cannot be avoided altogether but it can be significantly reduced with a little effort paying attention to where that waste is originating. Correct it immediately. More importantly is a number of wasted manpower hours you incur. From the very beginning, it is in your best interest to obtain software that can automate the tasks your people are doing daily such as those routine tasks delegated to HR and, of course, the spending control cloud-based platform mentioned above. From CNC automated manufacturing processes to regular mass email correspondence, there are many ways to control wasted labour by automating processes with today’s innovative technology.
5. Consider Outsourced Marketing
Finally, have you considered outsourcing your marketing? Many marketing firms now engage in direct marketing where they bring your products to market and literally build your client base for you. Most will work on a percentage of what they sell and so it is to their advantage to ‘push’ your merchandise. These outsourcing companies are also expert in advertising so you would literally be killing two birds with one stone.
You can clearly see that with a little foresight it is possible to significantly control your spending. By cutting your outlay and increasing your income you can quickly get your startup off the ground. The key to the success of any startup is to sell more and spend less. These tips should help!
Question: How do you check the financials at your startup? What tips do you use to control your financial flows? Is spending an major influencing parameter in your startup operation, or not? You can leave your comments or your questions, by clicking here.