New ventures demand extra care and caution in the initial days. Judicial use of time, money and resources is of utmost importance in a start-up. More often than not, it is seen that start-ups consume their capital amount before the prescribed time. This can primarily be due to unavailability of required funds during its inception, unforeseen expenses or mismanagement of funds.
You can save your start-up by taking some basic steps that will give your firm more time to sustain. Some of the ways that can help you with money and confidence to explore your new journey carefully are as follows.
1. Use Shared Or Remotely Located Offices
Property is one of the major contributors in the list of your expenses. Whether owned or rented, properties, especially in metro cities, are too expensive. Try working from home or find some space from a known person for free, if that suits you. If not, modern facilities of co-working spaces will come to your rescue here. “In the initial phase, it may be possible to work without a dedicated space for office. Saving money here, before you need expansion would help in the later stage,” said Raj Konar, founder & CEO of Fadoo TV, India’s first web TV.
Places like Awfis, Innov8 and ThePlayce are some of the co-working spaces available in metro cities that you can try.
2. Using Social Media For Advertising
Using technology reduces your costs in a major way. Take for example, costs of meetings. People now prefer conferences or video calls over face-to-face meetings to save time and resources. Similar is the case with advertisement of your brand. Internet, especially social media, has emerged as a huge space to display your brand. “Popularising your firm through social media influencers is a very influential way. It also helps save you some money,” said Apoorv Sharma, Co-founder of Venture Catalysts, a seed-funding and innovation platform.
3. Don’t Rush While Hiring
Many start-ups make this mistake. In order to show big teams and strength to clients, they end up over-hiring. Be thoughtful while hiring in a manner that you do not end up lifting people. “One of the biggest cost of a business is on its manpower. A consistent amount flows out of the pockets every month in the form of salaries. This, in the long run, could make the business difficult to sustain. Thus, hire carefully, don’t add to your staff unnecessarily,” added Sharma.
You can find freelancers for almost every job profile in the market. Opt for outsourcing work to such professionals to get your work done while keeping the hired staff at bare minimum requirement.
4. Go For Zero Or Minimised Inventory Model
If your business involves inventory, try to figure out a model where you can save on inventory storage space or at least minimise the requirement. A few years ago, I had interviewed the co-founder of localbanya.com, one of the pioneers in online portals for grocery. Rashi Choudhary, the co-founder, said they were saving on their major cost by having a small godown, as they didn’t store much of their products. She said, “We order products from our vendors only a day or two in advance so as to keep them fresh, save costs and have a quality check. This not only saves us the cost of storage space but also helps us minimise our operational costs by ensuring less wastage of perishable products like vegetables.”
Furthermore, shopping portals like eBay and Shopclues are examples of zero inventory models, where products are sourced directly from the sellers and not stored with the portals. This helps them save on delivery time too.
5. Keep A Check On Expenses
Believe it or not, maintaining accounts and having systematic entries of expenses help keeping a check over expenses and facilitates better planning. Ensure you have maintained your books in an orderly manner. “The first 18 months of any business are very crucial. Most of the time people end up using their funds before time. Proper planning and implementation with regular monitoring of the same would help immensely. You should also have a ‘Plan B’ or an alternative plan ready for your business operations so that in case of initial failure you don’t end up spending extra,” emphasised Sharma.
While this is an age-old method of exchange, barter helps, especially for a star-up. The initial phase of the company operations requires a range of products and services to establish itself. From stationery to furniture, everything you need in office will be easier to source if you have something tempting to offer except money.
7. Buy Second-Hand Equipment
Buying good, second-hand equipment, office furniture, computers, tables or chairs can help you save a lot of money. Websites like Quickr and OLX can be of help here. Of course, you need to check the quality before buying the product.
8. Focus On Revenue
“Saving money once your operations have started is really difficult. You will see your bills and loan payments piling up. But, your key should be growth. Steady and growing revenue will keep you motivated further. Work towards it,” said the founder & CEO of Fadoo TV.
Starting up is a journey with many roadblocks; a route where you may have to take diversions from your initial plans. Going ahead relentlessly with well-chalked out plans, patience and hard work can turn the effort into success.