With so many businesses launching every single day all over the world, it comes as no surprise that most have to operate on little to no budget to get by. “Waste not, want not” should be your mantra at this point, if you want to hit it big some day.
Items you should “ban” from your startup’s shopping list
Here are 5 shopping list items you can eliminate from your early-stage startup to keep operations running lean:
1. Company phones and computers
Of course, you’ll need to equip any administrative staff with their own desktop phone and computer. Other than that, we live in a modern work culture that encourages employees to bring their own equipment such as laptops, smartphones and tablets to work with them.
If you’re smart and using the cloud to store data, certain security protocols need to be put in place.
Why waste valuable capital buying these things when most professionals have their own tech – and probably prefer to use it over anything you could provide? Also, sales, marketing and recruitment professionals know there are certain personal expenses that go along with their job such as phones, laptops and tablets.
As the company grows, you may decide it’s best to provide this equipment, to ensure everyone’s using the fastest and most reliable equipment possible. You’ll know when/if that time comes.
2. Payroll services
It can be tempting to try to cross all the “T’s” right from the day you open. However, payroll services aren’t cheap and since you’re a startup: they’re really not necessary. Sure, it’s nice to have someone else worrying about the taxes, vacation pay, and such.
However, anyone worth using is going to charge hefty monthly rates and per transaction fees – well worth it once you hit a big growth spurt, but not until then. A good rule of thumb is to wait until you have at least 5 people in addition to the founders, before considering a payroll service provider.
3. Expensive domain names
Every SEO expert on the planet will tell you that there’s no other option than to buy the dotcom with your exact company name in the url. This will definitely be a factor later on, for branding purposes. However, beggars can’t be choosers and if you can’t get what you want for the price of a yearly registration fee, it might be best to start with something you can live with, like an acronym and/or using one of the many other domain extensions out there (ie., .biz) until you get your footing in the market.
Steer clear of domainers and private domain owners looking to make a profit off you, until you can really justify spending hundreds or thousands. Whatever you choose now can be later turned into a subdomain or redirect to your favorite domain name choice when you finally get it.
4. Team education programs (ie., professional development training)
All employees want to be made to feel like you have their future with your company in check and that you’ll provide training, helping them advance in your company and increase their value to you. Even most millennials actually feel that way according to this. However, extensive and even small training programs, beyond that which gets them in a seat and dishing out results, is going to break the budget during the startup phase.
Forgive me for being morbid; but you honestly don’t know whether your startup’s going to survive at this point, so there’s a 50/50 chance you’re doing nothing more than saving their next employer money on their own training expenses by dwindling the very capital that could keep you afloat during these lean times.
5. Company vehicles
Depending on the business you’re in, vehicles may very well be essential. But, many startup CEOs out there are still driving the same beat up old VW Jetta or Chevy Cavalier they’ve been driving for the last decade. And you definitely don’t need a company vehicle just for the sake of having something to park in the parking lot.
Even when it comes to a delivery-based business, there’s always other options to consider. If you’re running a restaurant, it’s more than common to hire employees on as sub-contractors who can use their own vehicle. In addition to saving you on vehicle purchases, doing this also eliminates hiring costs, employment taxes, car insurance, vehicle repairs and fuel expenses.
“I want it all, and I want it now” is a famous line from a Queen song that many of us can relate to. It’s hard to put off buying the items listed above, especially when an unbelievable bargain comes up, or when you see more established businesses outfitted with all the latest bells and whistles.
However, putting it off today can make the difference between struggling and getting by comfortably; closing the doors, or having enough to keep them open until that next round of receivables comes in.
Feel free to comment if you can think of other common items that should be left of any lean startup’s shopping list.