As a new business owner, you know the road to startup success or failure well, and you know that it’s a road that, for better or worse, is paved by cash flow. If your company is fortunate enough to have adequate capital, it can be a smooth and easy drive to success. If you find your business is cash-strapped though, that road is filled with bumps and potholes and can really impede your progress.
Funding your new business can be tough and a shortage of financial resources is a big issue for new businesses, especially if you’re spending money faster than you’re making it. To survive, you will need to find strategies for stretching your business dollars so that you can make it through those tough financial times with your business savvy. This requires being smart about your purchases and finding opportunities to save and make money.
Every new business owner has to understand the importance of constantly monitoring the bottom line.
Just as challenging as obtaining capital, however, is managing it. Without money, a business can’t operate, which is usually the death knell for a startup journey.
Let’s look at some ways that you can stretch your money to ensure that your business survives.
Look for cheap marketing
Building brand awareness for your company can be a challenge, especially if it’s an area you don’t have experience in. One route that you can take is paid advertising like that offered on Facebook and Twitter. That can get very expensive very fast, however.
If you are looking for ways to stretch your budget, that might not be something that you can afford right now.
An easy way to market more cheaply is by going to networking events. Look for your local meetings of the rotary club, chamber of commerce, and small business associations.
There are opportunities at these meetings to make tons of connections that could lead to new collaborations and onwards. The best thing about this is that there is no cost associated.
Another low budget source of advertising might be found in emails. It’s one of the cheapest ways to directly reach people who could be potential customers. You will need to spend a little to purchase email lists, but it could lead to a payoff.
Finally, a very popular source of marketing today is social media. Twitter, Facebook, and Instagram are great resources, even without paying for ads, and an easy way to build up a following. More than just updating a status, your business can use an account on these sites to highlight sales, new products, and special events and promotions.
Outsource your expenses
One of the ways that you can stretch your money is by outsourcing whenever you can. To save money, look for ways to do things “off-campus” so that you can save the money and resources it takes to do them in house. An example of this is a remote call center solution. If your business requires a help desk or a call center, setting up a customer service center will take a lot of money for the equipment, call center agents, and facility.
Virtual call centers are cloud-based contact centers that allow for the opportunity to decentralize all contact center operations. Virtual call centers save businesses money in facilities costs, operating costs, data center expenses, and more. Plus, remote call center agents can always be online, so you don’t have to worry about managing more schedules or paying for employee benefits for the call center agents.
Outsourcing some aspect of your operation is a great way to cut corners and save money. Look for opportunities to save money with a virtual call center solution without sacrificing customer service.
Reduce your product cost
One of the biggest costs that a business incurs, especially a new business, is acquiring inventory. Any company that is in the business of supplying goods to customers has to take note of the money they spend versus the money that they bring in. When new businesses are starting up, profit margins can be tight and every penny counts.
One way to stretch your money in this area is to buy discount merchandise that will reap larger profits. When a business is closing, often it will sell all remaining products, business supplies, and other goods in liquidation auctions, such as those where they sell Amazon liquidation pallets. These goods are typically sold at a significant discount, and retailers may purchase them to resell for profit. These types of liquidation pallets are a great way to stretch your money and secure cheaper merchandise. You can search for liquidators in your area that specialize in your products and purchase truckloads of the inventory at a discounted rate.
Fronting the cost for inventory acquisition can be expensive, but if you look for ways to lower that cost, you can cushion your bottom line.
Reduce your equipment cost
Another major expense is up fitting your business with the equipment needed to operate. Often, this cost can be a major expense before your business even opens.
Because every dollar counts when opening a new business, you should shop around for used equipment that will help to lower your start-up cost. You’d be surprised at how much restaurant equipment, such as that used by a bakery or a coffee shop, you can find in excellent condition, for example. Plus you’ll be getting equipment in good condition for the best price, because it’s use.
Of course, your needs will differ depending on what kind of business you are opening. You can search for used restaurant equipment to save money on your bakery, coffee shop, or ice cream shop. A retail store will need counters and racks. Whatever your needs are, chances are that there are opportunities to purchase used equipment so that you can stretch your money.
Save before you start a new business
This might seem counterintuitive to the title, but one of the best ways to stretch your dollars is to have dollars saved away before starting your company. If you try to start a business with limited savings with the idea to raise funding from investors, you could end up spending all of your time writing a business plan, pitching to investors, and not working on your product or marketing. While you might be able to raise some funds, when you spend that, you will need more and the process will continue and you could eventually run out of money. This is why you should have a “war chest” or some start-up capital beforehand.
To stretch your money, you have to have money. While it can be a good idea to get funding from investors, you should have some funds of your own.
Track your finances
Monitoring your earning and spending rates is critical. You don’t want to be in a position where you’re out of cash and your back is against the wall. The goal is to save money by stretching your dollars and then turning that into a profit. If you aren’t tracking your finances, however, you will have trouble stretching your money and knowing how much you can spend. Watching your bottom line is the best way to ensure your business’s financial health is to watch your books.
There are several software options and online tools to serve as a good starting point for your books. Most accountants can also assist you with your business bookkeeping if you need help.
Starting up a business can be a major undertaking and a high risk, however, if you are successful, it could also lead to a high reward. If you are looking for opportunities to start your own business, Forbes suggests that you look at small towns. Franchise ideas for small towns can offer a smorgasbord of ideas for small town businesses. So long as you take steps to stretch your money and watch your bottom line, you can be successful in your new venture whether you’re in a small town or a big city.
There are plenty of opportunities and niche market retail businesses that you could start in remote locations so stay curious, and use good financial planning to build yourself a successful business.