When you set up a new business venture, there are a lot of expenses to bear in mind. Where are you going to set up your business? How are you going to fund the first few months? What will you need to succeed?
There are very few businesses that are relatively cheap and easy to set up. In fact, for the most part, businesses are initially very expensive gambles. However, if you think about which sectors are in demand, plan carefully, and create a business plan to refer back to constantly, you should be well on your way towards a successful venture.
So where can you save?
Where you choose to set up your business is very important. If you are looking to attract highly prestigious clients, then you might get a better chance if you are located in a prime spot. This might mean the city centre for many businesses but for others such as spas or hotels, it could mean a particularly picturesque part of the countryside.
On the other hand, if you are looking to rock a startup millennial vibe, you might be able to get away with cheaper premises in a less reputable area on the basis that you are offering an alternative. The current fashion for industrial and minimalist interior design is definitely going to help you out here as it is quite easy to achieve on a budget.
The next question is whether you are prepared to buy your premises yet or if you are looking to rent. For the vast majority of startups, renting is the most sensible option. This will give you time to establish yourself but it will also make expansion easier should you need more physical space. In fact, many businesses continue to rent a long time into their journey because it is so much cheaper in the short term.
There are a few downsides to renting though, so it is still worth thinking about buying premises if you are able to afford it. When you rent, you may not be able to renew your agreement and could be asked to leave right after you have set yourselves up. This might be unlikely in the majority of cases but is definitely not going to happen if you buy. The other advantage of buying is that you can make the offices truly yours by building and decorating exactly as you like.
Business transport may not be an issue for many businesses but if you need your staff to get to places or your products shipping, it is very relevant to you. For example, you may not think of transportation for a consultancy business but if you need to go and see your client at their office, you need to work out how you are going to get there.
One option is to buy the vehicles you need to support your business. This can be a cheaper option if you are willing to buy second hand and you have somewhere for the vehicles to live when they aren’t out on the road – for example, do you have a garage or will your staff store their allocated vehicle at home? If you need a truck or two, visit TruckDealersAustralia.com.au for more information about the options you have.
Another option is to ask your staff to use their own vehicles and then pay for their fuel. The easiest method for this is to ask them to note down the miles they have covered and then pay a set amount per mile. This way, you don’t need to mess about with receipts or figure out how much to deduct for personal driving.
As for shipping products, the best thing you can do is to agree on a deal with a large logistics company to get the best prices you can. Many companies are open to doing deals if you agree on a contract with them so it is worth getting a few different quotes before you get started.
One of the very basic principles of business is that you must be able to offer something that your competitors can’t. This might be lower prices, better customer services or higher quality but whatever it is, you need to invest in that goal. While having stunning offices and expensive cars parked outside might look great, if you can’t then provide your clients with what they expect, you won’t last very long.
IT is the most fundamental part of almost every business nowadays to such an extent that you could generalise that all businesses are now tech companies at their core. It is so important that your CRM system retains customers and leads them smoothly through the conversion process, but it is also vital that your staff have systems in place to deal with the business they are responsible for.
There are lots of off-the-shelf IT programmes and software available but it might be that really your needs are better served by a unique piece dedicated to your particular business. This might be an expensive investment to make right at the start, but it is the best way to lay a foundation for success you can continue to build on down the line.
As your business expenses come flooding in, it can be quite easy to panic or get cold feet about the whole project. But this is the time to stay cool, calm and collected. This is the initial investment you have to make to ensure that you stand out in the market and while it is a lot at the moment, as soon as you get to work, the benefits should start coming in.
So here are the rules you need to follow:
- Take second hand where you can save
- Always negotiate a better deal with whoever you are working with
- Treat every expense as an investment
With these three rules, you will find yourself thinking differently about the money you spend and you will become more proactive about finding the best compromise for your business.