Keep a handle on costs when starting your business
It may be tempting, from a credibility point of view, to appear ‘established’ when launching your business. Whilst a professional image is a plus, this doesn’t have to equal expensive offices, new vehicles, a raft of employees or a high-end website. These elements may be necessary eventually, but only when the business has grown enough to support them.
Think of today’s largest companies: Microsoft, Apple, Google, Disney, Amazon. All of these gigantic brands were launched in their founders’ garages. These entrepreneurs were focused on their product and their audience rather than having swanky premises to swan around in (though they have these now, of course).
When starting out, only take up the space you need. If you offer a service, you could probably do all your admin from home and deliver your offering at your customers’ premises or over the web. Alternatively, look at hotdesking solutions in your locality—some may offer office space that you can rent by the day/week.
If you create/manufacture a product and can’t do this from your kitchen table, consider renting a collaborative space with other entrepreneurs to keep rental costs down in your business’s early days.
There’s a lot to be said about the return on your branding spend. If you don’t invest enough, you may waste what you’ve spent, as people will judge you as an amateur. On the other hand, it’s probably not worth shelling out thousands for branded uniform, decals on your vehicles and a website that houses features you’ll never use.
It’s a fine balance between presenting the correct message and appearing competent and credible whilst also getting value for money and not paying for more than you need.
Depending on what you offer, you may need staff straightaway (e.g. if you have a retail outlet or restaurant). You could offer zero-hour or part-time contracts and do a lot of the work yourself in the early days, increasing your employees’ hours as you get busier.
Zero-hour contracts may be the thorn in the side of unions and other organisations that champion employees’ rights, but they’re not illegal and they can help small businesses to manage their staff costs as they grow. If the business was to fail, the employee would be out of a job anyway.
If such contracts don’t sit well with you, you could always offer other perks to your staff in compensation, such as a decent hourly rate.
There are many networking organisations across the UK, and some come with a hefty price tag to be a member. For some businesses, such as accountants and HR professionals, it’s worth paying this fee as a shortcut to clients; most members will be in need of your services, and you should quickly recoup your membership fee. For creative and niche businesses, however, such groups aren’t as effective when it comes to acquiring leads.
Whilst networking is never just about the people in the room, it can take much longer to recoup expensive membership fees for some businesses, if at all. In the beginning, you will still be able to build up a wide-ranging base of connections if you focus on free and affordable events and opportunities to network.
This may be simply a laptop, or you may need specific machinery to make your product. Rather than committing to buying necessary equipment outright (which will depreciate as soon as you purchase it), consider second-hand or renting what you need. As long as the equipment is in good working order, it only hurts your bottom line to buy it outright, as opposed to renting/buying used goods. The money saved could be put to much better use within your business.
Buying data and lists of potential leads may seem like a shortcut, but in the long run it’s not a money saver. There’s a hell of a lot of emphasis placed on attraction marketing and engagement nowadays…in 2021, cold leads may as well be invisible leads. The same goes for buying followers/likes on social media—it will quickly become obvious that you don’t get any engagement from these followers, and most are scams/fake accounts anyway.
The very best way to gather customers’ details for marketing purposes is to get amongst them, and/or offering something free for their information. Market research is something every new business needs to practice, if they don’t want to waste money chasing unsuitable leads.
There are more things we could add to this list, but these are the main elements new business owners become stuck on. A fifth of all new UK enterprises fail—spending unnecessarily can be one of the reasons for their downfall. At the beginning of your entrepreneurial journey, it’s more important than at any other point to keep track of your costs and to eke out every last drop of value from any investment made, however small or seemingly insignificant.
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