Starting up a small business is a great way to get ahead financially, and a great way to leverage your time and talents. Small businesses are also a key part of our economy and so need to be fostered and encouraged. A difficult part about starting a new business is that they can be really expensive.
When you’re just starting out, it helps if you have a structured outline to follow to track and then hopefully reduce your start up costs. We’ve come up with some tricks of the trade which work for any new business owner to get them pumping, without a huge cash injection. If you want to start a business on a budget you can – you just need to know what to do.
Read on to find out how you can maximise your business with minimal cash.
Keep your overheads low
You don’t need the very best of everything – some cheap mobile phones for you and your staff or business partners will do in place of the very latest and best iPhones, and you’ll find that by saving money on assets, you’re not going to have cash tied up when you need it the most. The same thing applies to equipment and goods, so ensure that you’re shopping around and looking for second-hand or bulk lots of equipment, as this will save you money.
If you’re starting up a new business, you need to ensure that you’re monitoring and tracking everything from the very start – that way you’re not going to be stuck scrambling around for receipts come tax time. You need to monitor the purchase of equipment, furnishings and payments that you make – and figure out what kind of tax breaks (if any) you are able to get so that you can leverage this to the maximum ability possible. There are a heap of different options available in the cloud for storing your records, so look into this and figure out what will work for you.
Use contractors instead of hired staff
The benefit to using a contractor when you’re starting up is that you’re not going to have unnecessary people on your staff when you don’t need them, and you’re not going to be hemorrhaging money on staff costs – a huge component of your outgoings. You only need to hire someone for as long as you need them, and then you also don’t have to pay tax or annual leave or sick pay. Of course, you will be paying them slightly more to accommodate for this lack of ongoing commitment as an employee – but this will be worth more to you in the long run.
Figure out your start up costs
Find out what you’re going to need to start up your business effectively and include things like computer equipment, POS systems and office supplies if any. Figure out what you can keep in the cloud – which will reduce your ‘real world’ items and thus reduce your overhead costs, and then come up with a budget to accommodate for all of the items that you need.
Figure out what you’ve borrowed or are going to borrow – whether it’s from the bank or from friends – and keep track of all of the information in the one place. If you have accounting software, this will be very helpful for monitoring purposes.
Make sure you do your research about depreciation and figure out which items you might be able to delay purchasing to be the most financially beneficial for you.
Find out what you are going to be able to claim as an up-front deduction. Maximise the possible benefit of any up-front deductions and leverage these come tax time.
Don’t forget to track, monitor and optimise your cost and outgoings in order to keep your costs as low as possible.