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Free Book Preview Entrepreneur Kids: All About Money
When we think of what it means to be a CEO, we often think of the big corner office, glitzy company dinners and a sky’s-the-limit corporate credit card. In reality, that’s not the case for most CEOs in America, especially for startup CEOs. In many instances, company capital is linked directly to the founder’s personal checking account and the CEO’s corporate credit card is often the same Mastercard he or she uses for groceries.
When the glitzy corporate dinners translate into eating ramen noodles out of a coffee mug and if lunch consists of peanut butter-and-jelly-sandwiches eaten at a desk, you’re likely in startup mode, when every dollar counts. Here are five ways to trim your startup budget without sacrificing quality or opportunity:
1. Oust outsourcing. When it comes to social media marketing, overspending is easy, especially if you're dreaming about a viral campaign that turns your company into an overnight sensation. When you absolutely have to outsource your online marketing, talk to former clients of the vendor in question about their success rates and insist on tying payment directly to achievement. Also, pay close attention to what rising competitors are doing with social media and follow their example, but add your own spin.
2. Compress to impress. Don’t waste money on unneeded “fillers” like fancy office space or investor dinners. Instead, try more creative locations for investor meetings. If you’re creating a retail concept, meet at a local mall and walk investors through how your product or store is different. If you’re creating a new food concept, gather at a local grocery store or restaurant chain that you envision selling to. Even having coffee in lieu of lunch or dinner, not only saves money but proves to investors that you're watching the budget.
3. Take risks on creativity. Creativity costs you nothing (unless you really mess it up!) and can make your brand stand out, which is key for marketing your startup. Part of creating a brand for your company is giving it a personality. Think freely here; go with your gut. Just be sure to not offend anyone.
4. Go big or go home. Investors and partners don’t need to know that you live in your PJs, work from a garage and wear UGGs to your “office.” You can rapidly grow your company and make a big impression with minimal spending. Go “big” by paying a low monthly fee on an answering service or online help desk. Rely on trusted virtual resources and local entrepreneur meet-ups. Explore options at nearby universities, including mentoring students who, in time, may become valuable colleagues.
5. Pay in kind and ask for favors. For example, if you’re starting a catering company, offer to cater a dinner once a month for your accountant to lower his or her fees. Not only can this reduce expenses, it’s a great way to market your services. Don’t be afraid to ask for favors or trades. Have a friend in marketing? Ask that person to tweak your website or newsletter campaign. Know a graphic designer? See if he or she will help design your logo. When asking for favors, just remember that you should be assisting others when they ask; it’s all about paying it forward.
As you call in these favors, be cautious when friends or colleagues ask for equity in return. While it may not seem like a big deal now, if your company meets with success those types of early allowances could cost you millions down the road. But, then again, that may a good problem to overcome.