Expert Tips on Innovative Ways to Cut Costs For Start-Ups
In running a start-up business, there are two ways to build a profit. The main way is to increase sales. Increasing sales is the most common and familiar way to do it but it’s also the way that you don’t have full control over… this is when the second way to build profit comes in. The second way to build a profit is to cut costs. By cutting costs and spending less, you’ll be able to add to your bottom line without taking away from the quality of your products or the customer experience.
Upon entering the entrepreneurial world, the Small Business Administration has made it very clear about the small business survival rate but your business doesn’t have to be part of that statistic. Yes, the numbers are quite intimidating and can actually discourage you from even starting the process of getting your business off the ground but that information isn’t mean to scare you… it’s meant to push you.
You should be able to look at those stats and feel empowered to not fall victim to failure. You already know that increasing sales is the number one way to build a profitable business, now you just need to figure out ways you can cut costs. This can be a bit tricky in a sense because there are several working parts to it but it’s not impossible.
Take it from those who’ve come before you… they know what it takes to beat the stereotypical small business survival rate and a sizable amount of it is due to cutting costs. Take a look at some of the most innovative way to cut costs on your modern start-up business.
Tip 1: Hire Inexperienced College Graduates
You’re probably thinking “why would I do that?” Well, hiring “experienced” candidates isn’t always what it’s cracked up to be… they’re not trainable and they’re expensive! With “fresh out of college” graduates, you’re getting the advantage of paying an entry-level salary and you’ll have employees who are informed on the latest technological advancements… ultimately what you’re getting is smart college grads who understand the industry, they just don’t have “ont he job” experience yet.
All college graduates want is an opportunity to get experience in their field. Most job postings require “X amount of years of experience” and small business owners are actually killing their businesses by making job postings with that requirement because it’s discouraging to very talented individuals who could potentially take your business to the next level.
So before you make a job posting for a certain position, consider leaving out the experience portion and see what kind of talent comes through.
Tip 2: Buy Used Equipment
Being that you’ll be starting a new business, you might think that you need to buy new equipment… that’s not the case at all. Your business can still operate off of a used desktop or printer and produce the same results as a new desktop or printer. In fact, to add to a used printer, there are ways you can save printer ink and make it last longer! That same logic goes with phones too.
These days, the way smartphones are designed, you can run your business from the palm of your hands but you don’t need a new cell phone to do it… As a business owner, you’re not going to want business calls coming to your personal cell so what do you do? You get yourself a business phone.
In acquiring a business phone, that doesn’t mean you have to pay the big bucks for it. You can buy a pre-owned new model iPhone that has all the same features and functions as a new phone for a fraction of the cost. That just goes to show you that just because your business is new, that doesn’t mean it can’t operate and be successful by utilizing used equipment… used equipment is also one of the things that are going to add to your bottom line.
Tip 3: Ask For a Discount
You won’t know something until you ask, and there’s nothing wrong with asking if a vendor or supplier offers any kind of discount… the worst they can tell you is no. If you get a “no,” then it’s time for you to move on to tip #4, and see if you can negotiate your way into some sort of discount!
Tip 4: Negotiate, Negotiate, Negotiate!
As a business owner, you’re going to have to put on your negotiation face and talk business. Whether it’s suppliers, vendors, or consultants, you know what type of financial weight your business can handle and what it can’t so whether you have to be firm or charming, you have to negotiate your way through products and services to meet your business needs… never settle if something doesn’t meet your budget; you can always take your business elsewhere.