Friday, June 10, 2016
14 Ways to Save Money When Starting or Growing a Business
In Main Street Entrepreneur, lifelong entrepreneur, business consultant and university professor Michael Glauser reveals how to achieve your dreams by implementing the nine keys of entrepreneurial success. In this edited excerpt, Glauser offers 14 smart tips you can use to be more resourceful when running your business.
Trying to run a lean business? Here’s a list of 14 valuable strategies I’ve seen successful entrepreneurs use over the years to launch and grow their companies with minimal costs. Study this list carefully, then decide which of these you can use in your new enterprise.
1. Mentors and Advisors
Instead of paying for advice on legal, accounting, funding or other key business issues, use your brain trust of mentors and advisors as much as you can for advice, feedback, and meeting other important contacts.
2. Free Consulting Services
Organizations like SCORE and your local Small Business Development Center (SBDC) offer free consulting and training. SCORE has more than 300 chapters in the United States, and everyone who calls gets an appointment. There are nearly 1,000 SBDCs in the United States that offer free consulting and educational services.
3. Barter or Trade
Bartering -- swapping one thing for another -- has been an effective way of doing business for centuries. In recent years, bartering has evolved into a sound strategy for finding goods, trading services, conserving cash, moving inventory, and locating excess production capacity. The International Reciprocal Trade Association (IRTA) helps match up companies interested in bartering for goods and services.
4. Nonmonetary Incentives
Members of your team will often work for equity or deferred payments rather than initial salaries. This will help you keep costs down during the launch and early growth stages of your business.
5. Supplier Partnerships
The right suppliers can save you a great deal of time and money: They can provide high-quality materials, help with product development, offer on-time delivery, and allow extended payment terms. Obtaining 30 to 90 days of trade credit is the best business loan you can get.
6. Customer Partnerships
Partnering with customers during your launch is an excellent cost-saving strategy. Select a few key customers, and offer them deals they cannot refuse: discounted pricing, special packaging, strong support, etc. In exchange for these deals, ask for long-term commitments to purchase your products. And whenever possible, get customers to pay early -- ideally, even before you deliver their products or services.
Outsourcing is a multibillion-dollar industry. You can find outsource partners to provide just about any product or service you need. Outsourcing turns what would normally be a fixed cost into a variable cost because you only use the service when you need it.
8. Distributors, Reps, and Affiliate Partners
Most industries have distributors, manufacturers’ representatives, and affiliate partners who will sell your products through their existing distribution channels, which can be extensive. This is a great way to build sales quickly and conserve cash because you don’t pay the partner until your products are sold.
9. Commissioned Sales Force
Use a commission sales program when you’re ready to hire team members to sell. This will attract people who really believe in you, your products, and your purpose. It also conserves cash by keeping your fixed costs low.
10. Work Virtually
In this new age of technology, it’s possible to work from just about anywhere: from home, in your car, at the airport, or in a hotel room. By working virtually -- and allowing your employees to do the same -- it’s not necessary to take on the expense of establishing an office when you’re launching your business.
11. Borrow, Rent, Buy Used
Find ways to use other people’s resources in addition to your own. Whenever possible, borrow rather than rent; rent rather than buy; and buy used rather than new. Some industries have excellent equipment available for a dime on the dollar. Also, go to bankruptcy sales and auctions to see if you can find what you need.
12. Use Free Software
Free and inexpensive software is plentiful online. Various available programs can help you manage your finances, plan your projects, track your customers, and much more. You can also take advantage of free trial periods for most business software. This gives you a chance to use the application for free for 30 days or more to determine if you really need it.
13. Minimize Your Expenses
Keep your personal expenses to a minimum when launching your new venture. This isn’t the time to buy a new house or a new car or take on personal debt. The longer you can live with minimal expenses, the better off you’ll be. Likewise, don’t take on any ongoing business expenses unless they’re absolutely necessary.
14. Sell, Sell, Sell
In startup companies everyone is in sales. All your team members need to talk about your company, promote your products, and assume responsibility for producing revenue. Remember, low costs and early cash flow are critical to success.
Image Credit: Shutterstock.com
Theresa Todman, Managing Partner/CEO of B&M Financial Management Services, LLC . Theresa specializes in bookkeeping, accounting, QuickBooks solutions, small business tax issues and consulting.
Posted by Theresa Todman