Launching your own start-up is an exciting process, with the potential to bring you long-term success and much-needed revenue.
However, becoming an entrepreneur involves taking a significant financial risk, and it can also be surprisingly costly, particularly in the first year or two. The average cost of launching a business in the UK can hover around the £5000 mark, and in the first year, the average start-up can find itself forking out over £22, 000.
Fortunately, there are various tools and techniques you can use to help reduce your start-up expenses in your first year – or, indeed, well into the future. Read on to find out more.
Create A Detailed Financial Plan
One of the most effective ways to keep your expenses down, particularly in the first few months, is to lay a solid foundation before your business even launches. This involves drafting a detailed financial plan that will serve as your roadmap for the future; it can also help you win investors, and come up with solutions for any potential obstacles you foresee.
Your financial plan should ideally include various projections, including your projected sales, expenses, and balance sheets. It can also feature simulations and analysis, including market research, which you should use to your advantage. This kind of knowledge can help you hone your products or services and increase your chances of success by giving your consumers exactly what they want, or by exploiting a previously untapped niche.
Be Selective With Your Utilities Suppliers
While some start-ups begin their life in their founder’s home, others may launch from their own business premises. If your situation is the latter, then you are probably already familiar with the costs that come hand-in-hand with having your own commercial property. These costs include paying for electricity, Wi-Fi, and water.
As the cost of living crisis continues to affect businesses, it’s a good idea to find ways to lower your utilities bills. This includes engaging in energy efficient practices, and possibly even switching providers if your current supplier is proving too costly.
For example, if you want to compare business water contracts and find a better deal, The Business Water Shop can assist with business water savings by helping you find the most competitive rates.
Forge Useful Contacts
In the business world, you never know when a new acquaintance might turn out to be helpful in boosting your new enterprise and helping you get off the ground.
With this thought in mind, you may want to consider going to some local networking events. These kinds of gatherings can bring a number of benefits. These include introducing you to other local business owners, not to mention potential customers.
From your fellow business owners, you can pick up valuable tips on how to manage your start-up effectively and give it the best possible chance of survival. You may also meet people who can provide referrals to their friends or colleagues, potentially drumming up additional business; they may even wish to buy from you directly themselves. People will often prefer to do business with entrepreneurs they have met in person, as it is easier to trust someone you know.
Use Free Tools And Services
When it comes to things like the software and apps you use to help you with your daily business practices, try and find free options wherever possible.
For example, if you need to communicate with anyone – be it a customer, a supplier, or an investor – you can make use of free communication tools such as Skype and Zoom.
You can also find high-quality project management software for free, including the likes of ClickUp, Zoho Projects, and Asana Basic. These platforms allow you to perform an array of crucial tasks, including scheduling and managing projects, without having to pay a penny.
Embrace Remote Working
One effective way to keep your start-up expenditure to a minimum is to allow hybrid or remote working. With no office space to pay for, you will fore-go the significant cost of renting a commercial property, paying council tax, and forking out for everything from Wi-Fi and air-conditioning, to water, equipment, and office supplies.
In fact, remote working could reduce your start-up’s running costs by up to one third, making it a business model that’s well worth considering, at least for the first year or two, while your new venture is still finding its feet.
Don’t Shy Away From Buying Second-Hand
If you do decide to rent an office space during your start-up’s first year, you can help to lower your payments by purchasing second-hand furnishings and equipment where possible. By browsing websites such as eBay, Preloved, and Gumtree, you could find all kinds of bargains; after all, just because something isn’t brand-new, doesn’t mean it isn’t still in good condition.
While launching your own business can be both daunting and expensive, there are various methods you can use to keep your costs as low as possible, especially during the first year of your start-up’s life.
These techniques will allow you to devote more funds to helping your new enterprise get off the ground, so that it will hopefully join the ranks of the many start-ups that prevailed and became a successful, thriving business.