With around 90% of all startups failing, the importance of being frugal cannot be overstated. You’re likely to be struggling for money in the early stages of your venture. This can put you in a precarious position, so it is imperative you keep operating costs as low as possible. There are a number of ways you can do this, in turn offsetting your lack of financial muscle and giving yourself the best chance of long-term success.
Don’t commit to office space you don’t need
Many startups opt for the tried and tested conventional leased office, and you could be tempted to do the same. However, this may not actually be the most sensible way to go, and choosing a serviced office space could actually be the most financially prudent decision.
Rather than being tied down to a lengthy lease, serviced offices enable you to renew your contract on a rolling basis, instead of committing a huge amount of capital on a lease you can’t get out of until the fixed term is up. This type of model gives you the flexibility to scale up and down as needed, so you can choose a smaller and cheaper serviced office space if required.
In addition, you only pay for the space you truly need with serviced offices, with facilities like toilets, kitchens and break rooms usually communal. This is in contrast to a leased office where you typically pay rent on the whole internal area, meaning it costs significantly more.
Serviced office providers Landmark point out that many amenities are included in the price paid, representing a sensible move for a thrifty startup. For instance, professional reception teams, cleaners and IT technicians are all available onsite, allowing businesses to save on staff costs.
Make use of free marketing tools
Marketing your startup is clearly an important step to success, and worth the time and effort it takes to do so properly. Marketing does not have to cost an arm and a leg, however. In fact, many marketing methods don’t actually cost anything at all. Instead of splashing out significant sums on expensive marketing tools, why not make use of the free tools out there? These can be just as useful as their pricey counterparts, and enable your startup to cut costs whilst it’s in its infancy.
For instance, Hubspot’s CRM system is a great—and crucially, free—way for you to keep track of your clients. The customer-relationship management system enables you to store information about the people and companies you interact with, and also includes features like sales and marketing dashboards and marketing conversion and sales tools. CRM tools have been proven to boost revenue and productivity, amongst a whole host of other advantages, and can benefit your startup immensely.
Another fantastic marketing tool is Mailchimp, which is used for email marketing and offers a free plan for up to 2,000 subscribers and 12,000 emails a month. The software enables you to easily create email marketing campaigns through features like design tools and automation capabilities, as well as enabling you to analyse the results. Considering consumers who buy products via email spend 138% more than individuals that aren’t sent email offers, and 59% of B2B marketers state that email is their most effective marketing channel, Mailchimp can be invaluable for startups. These are just two examples of free marketing tools you can use to help reduce expenditure—for more examples, be sure to check out Forbes’ page on the subject.
Ditch costly conferences and network instead
Networking is another crucial element of growing your startup, but it is advisable to ditch the costly conferences in your company’s early days. Whilst conferences can be a great way of meeting others in person and effectively building up your network, they are typically very expensive. It’s not just the extortionate ticket prices that will set you back, but the travel, accommodation and food costs too, making conferences ill-suited to startups seeking to be economical.
Instead, it is advisable that you conduct most of your networking on social media, and harness platforms like LinkedIn, Facebook and Twitter to connect with other professionals in your industry for free. This article by Inc.com gives good advice on how exactly you can focus your social media networking efforts. Also be sure to look out for free networking opportunities, with a range of sites offering listings of free or cheap networking events.