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  • How to keep start-up costs down
    As a start-up company, it is normal to want to get your business up and running for the smallest possible cost; however, cutting corners can prove fatal. Here are a few tips to get your new venture up and running without breaking the bank. There are several factors that will directly affect your business that you will not be able to control. Things such as the economic climate, general marketing fads and even social media will, to some degree, determine your success. Regardless of these factors, one thing you can control is expenditure. It is no secret that successful enterprises monitor and count every single dollar they spend. As your company becomes better established and you gain experience, planning and controlling expenditure will become easier. However, from the very beginning you will want to pay particular attention to the following factors. Funding your business Borrowing from the bank to fund your new business venture can add a financial burden, as credit seems to be increasingly expensive. Making monthly payments to a credit institution to repay what you have borrowed does add up, and the rules and regulations that are often attached to business loans can prove punitive. To secure an inexpensive and perhaps even more convenient type of funding, consider raising investments. This is the most flexible option when it comes to securing the much-needed money to fund your new business. Not only can you involve friends and family in your fledgling company, the repayment terms are likely to be much more favourable than those offered by a traditional lender. However, it is important to consider that this source of funding does have the potential to add stress to the relationship between friends and family, should your business fail. Angel investments are another route you should explore and most angels offer more than money, they offer advice, guidance and open doors to customers. Angels take an amount of equity in your company in return for their investments, Office space How wonderful is it to perceive yourself in a plush office with polished furniture, modern equipment and a high-back leather chair, not to mention a personal assistant who caters to your needs? Although having such an office space may provide the much-desired wow-factor for visitors, it comes at a high cost. Instead of investing in unnecessary luxury, consider the advice from Ashok Kurien who says, “Try and stay in the bedroom or whatever little space you have as long as you can to keep real estate costs down or find an incubator space where the office costs are relatively low. Quite a lot of people get into trouble spending too much on their office accommodation too soon.” There are instances when a requirement for office space is unavoidable if the company is to thrive. In this case, weigh all the options available, such as sharing office space and ensuring any space you do rent comes with flexible terms. Don’t necessarily look straight away at serviced offices. Generally, with service-oriented companies, clients and customers care more about the quality of the service than where the back office is located. Business equipment If you are at the stage of considering financing and planning office space, you must already know your business equipment requirements. This area of your company should be planned rather carefully, keeping track of every dollar spent. When you are in the set-up or planning phase of a new company, it is best to invest in equipment that is necessary and avoid making frivolous purchases. Purchasing exactly what is required is the best way to avoid overspending. Remember, if its borrowed money you are paying interest, so overspending will only cost more in the long run. The best way to stick to just the necessities is to make a list of your business’s equipment needs by itemising its key functions. From there you should be able to easily work out the equipment required to perform these tasks. There are plenty of great second hand opportunities when it comes to purchasing equipment, regardless of what you need. Everything from office furniture and electronic equipment to large-scale construction equipment can be purchased second hand, inevitably saving a bundle of money. If you have a large business, such as a construction or other mechanical related venture, you will now need to find somewhere to store it all. Regardless of what it is you need to store, make certain you lease or rent your storage space instead of buying it. By leasing you keep your options open to change and cut costs as your business develops. Always remember, it is quality over quantity that matters when it comes to equipment. There is no point in buying used items of poor quality that will continually cost money for upkeep. This is especially important if the items directly relate to the quality of the service or product you are selling. Employees Your employee count may consist of one person for quite some time, that person being you. It is best to keep your employee count as low as possible for as long as possible. This too, will also help keep your finances in check. If, however, you are in need of employees upfront, do your homework by utilising local freelance sites where possible. Instead of recruiting one or more full-time employees to increase your staff base, consider hiring people who work on a freelance basis. This option still provides you with the help you need, but at a fraction of the cost of a full-time staff member. Depending on the business, you may even want to consider hiring interns or students who are in need of work experience. Also use your own network to find people and Linkedin. If you have the right business you may be able to excite employees to become founding members in return for a reduced salary. Promoting and marketing your business Our modern online world has changed the old marketing strategies. Companies have gone from placing flyers on windshields to using social media and other types on online advertising. This may very well be one of the most time consuming avenues for your business, due to the seemingly endless range of choices available in the field of marketing and promotion. Do your homework and opt for the most cost-effective options, such as the free social media pages you can create on Facebook. Get your business online with a Twitter and Linkedin account. Viral marketing is by far the best way of getting a cost effective marketing campaign up, the trick is that it needs a different and exciting hook that others will follow and forward to friends and family. If it grabs press attention even better, your certainly on your way to building your awareness for free. If these forms of marketing do not suit your business and you have to pay to advertise, be sure to negotiate on the rates and price. Perhaps it is possible to offer your services to the media company in exchange for advertising. Tammy Butler of Prime Group explains, “Speak to the magazines/publications you may want to be in and get them to write an article – non-salesy – to go alongside any advert you may book.” Today, any successful business will have an online presence. Having a corporate web page is essential, which means it is imperative you also have one. A web page does not have to be flashy, complicated or cost thousands of dollars. It is easy enough to exercise your own web talent by signing up with an inexpensive web page tutorial service and create an online presence. By learning to do it yourself, you will not only be minimising your costs, you will also be able to expand the website as your company grows.
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