It may sound counterintuitive, but one of the entrepreneurship tips you can glean from the countless start-ups that have come before you is to not overspend. This means not being tempted to overspend investor money or small business funding and stay within your budget until your product or service takes off.
This requires a frugal approach at a time when you’re excited about the new venture. However, the Small Business Association (SBA) says micro-businesses can get started with as little as a $3,000 investment. In many cases, no small business funding may even be needed.
There are all kinds of opportunities for saving money these days. Benetrends has compiled some money-saving hacks to help keep you from overspending and ensure the future success of your small business.
Start Small and Plan Well
Cash flow is everything to a small business. There is often a gap between when bills are due and when your clients pay you, so planning must occur to keep things flowing smoothly. It is the unexpected expenses such as a customer default which can sink your growing business. Starting small and planning well can help you get through any lean times you may experience. Use these tips to stretch your resources:
- Separate your business accounts from your personal finances to ensure you have an accurate picture of business success. Open a business checking and savings account and have a credit card just for business expenses. Give yourself a salary and don't exceed it. Reduce your personal expenses as far as you can before taking on the added expense of a new business.
- Do not buy everything for your business. There are many ways to operate a business while cutting overhead costs. To save on the expense of leasing space, take advantage of co-working space solutions.
Co-working spaces allow you a comfortable place to meet clients without big overhead when your business is just getting established. Many of these spaces even allow you the use of office equipment for a small fee. Similarly, you may find that leasing equipment is a better option than buying outright. If you are leasing space, consider purchasing office furniture from a surplus warehouse.
- Use software as a service (SaaS) for the tools you need to run your company. SaaS is available wherever there is an internet connection for a low monthly fee. You can use low-cost accounting software, customer relationship management (CRM), email, cloud filing, and much more.
- Establish a trusted relationship with a business banker. Go into your bank to say hello when you make your deposits. Share small details so they get to understand your business. At some point, you may approach these professionals for a bank loan, so do your best to build a relationship now before you need to ask.
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- Learn to budget and do accounting and billing. While you do not have to be a CPA, learning these skills will help you work with these professionals later on. In the meantime, you can apply what you know to track profitability, forecast cash flow, and control your business. There are many types of online calculators that can help you keep on track.
Staying frugal in the early years of your business will help you stay afloat and prepare for the growth ahead. But even by following these steps , you may still be in need of small business funding, and that's where Benetrends comes in. With our 35+ years of expertise and a comprehensive suite of funding solutions, we can help you find the best options to launch your dreams of business ownership. In the meantime, you can download a free copy of The Definitive Guide To 401(k)/ROBS Business Funding to learn more.