Not everyone has the courage to quit their job only to launch a startup of their own, and yet, we see more and more people saying goodbye to their cushy jobs to start working for something that they are actually passionate about. However, as inspiring and optimistic this is, the budding entrepreneurs of today’s era do face all kinds of challenges. A major one among them is cash flow management.
When your business is new, then the expenses are usually a lot higher than profits. This is because you have to spend a lot of money on equipment, inventory, office space, etc. However, there are various things that you can do to reduce your costs. Some of these are:
1. Going Paperless
A paperless office is more productive and causes less wastage of money. Imagine the amount of paper and ink your business will consume every week if you largely depend on paper invoices, reports, receipts, and other documents. Maintenance of printers isn’t really cheap either. So, instead what you can do is use digital documents whenever possible. Besides, there are many other good reasons why going paperless can benefit your business such as easy knowledge sharing between staff, and faster payments.
2. Outsourcing
Your employees could easily be your biggest expense. The problem is, they are indispensable for running the business. So, what can you do to bring the costs down without compromising with the roles and responsibilities the human resources have in the office? Well, “Outsourcing” is the answer.
You will be surprised to see the kind of talent that popular freelancing platforms like Fiverr or Freelancer can provide. From seasoned accountants to virtual assistants, there are all kinds of professionals on these platforms that you can hire on a contract-basis for a much lower price than you are currently paying. All you have to do is create a business account on a platform of your choice, post your requirements, and select the appropriate workers based on their ratings and experience. Don’t forget to ask for references and sample work though.
3. Using Affordable Branding Solutions
If you want your startup to be successful, then you can’t ignore top-notch branding. However, you don’t have to pay an arm and leg for it.
Gone are the days when professional branding services were only accessible to medium or large enterprises. Today, there are all kinds of easily accessible and affordable branding tools on the Internet that you can use. For instance, you can use an advanced logo maker tool to design a premium-quality logo for your company in a matter of minutes yourself. You don’t even have to spend more than $5 for the design, and the process itself is so simple that you can get unbelieable results even if you don’t have a background in art or design.
4. Using the Capital Wisely
Spending your money wisely is one of the most important tips that startups should follow to succeed. You can’t afford to splurge money when you are just starting out. So, avoiding buying new furniture and equipment if you can find all such items in pre-owned condition for a much lower price. Similarly, there is no need to spend a lot of money on a commercial space in a prime location if there are cheaper alternatives available.
5. Learn Digital Marketing
Digital tools are a boon to small businesses and one of these is digital marketing. By learning various forms of digital marketing which include social media marketing, blogging, email marketing, etc. you can grow your business much faster than your rivals and save tons of money too.
The biggest reason why digital marketing is perfect for small businesses is that it’s ridiculously cheap or even free! This is because you can market your brand on social media platforms like Facebook or Instagram by sharing interesting content via your business page, send newsletters to a large number of email users via specialized tools, and much more without spending a penny. Plus, if you don’t know anything about digital marketing, then you can find all kinds of tutorials and eBooks on the Internet easily.
6. Optimize Cash Flow
A lot of times, it’s not the lack of money which is the problem, but rather slower recovery of money from your clients. The truth is that no business is impervious to lazy customers and clients that take forever to clear their invoices. If you fail to make prior arrangements for these kinds of situations, then you can easily end up in a cash crunch.
To improve cash flow and avoid revenue deficiency, try to create a stringent invoicing policy in which customers that delay the payments can be fined an appropriate amount. In the same way, you can also encourage them to clear the payments faster by offering small discounts. You can also set up an automated reminder system that can shoot emails to your clients on its own after a certain number of days passed since the payment deadline. Small steps like these can make the cash flow much more predicable and prevent your business from running low on liquidity.
7. Fine More Affordable Suppliers
There is no harm in looking for alternative suppliers that can offer better rates on office supplies, equipment, and services like cleaning and repairs. Otherwise, you can try to negotiate with your current vendors and see if they are willing to settle for lower rates. That said, you should never compromise with the quality of the services you are getting even if more affordable options are available.
Running your own business has many advantages such as a sense of fulfilment, making a difference in the society, and more. While you do face new challenges every new day, they teach you a lot of things too. So, don’t fret if you make wrong decisions and consider them as stepping stones to success. Besides, as far the money problems are considered, the tips above should be of great help. Good luck!