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Oct 19

10 Simple Ways that Entrepreneurs can Save Money When Starting a Business

Reading Time: 4 mins

Starting a business can be extremely expensive, but there’s no reason that it needs to be. While you might think you have to scrip and save in order to reduce the overall cost of ownership when building a new firm, the fact is that saving cash might be far easier than you think.

More than 20 percent of new business owners launch a company with less than $5,000 in hard cash, so it might be possible to get by with even less. Take a look at these money-saving tips and see if you can’t figure out a way for your dreams to come true on a shoestring budget.

 

1. Plan Your Insurance Costs

Insurance costs for company vehicles can quickly spiral out of control, so you’ll probably want to consider keeping your fleet small for the foreseeable future. Increasing your voluntary excess might be a good idea, since it can lower your upfront costs until your company has grown to the point where it might afford a more sophisticated insurance package.

 

2. Invest in Used Equipment

Don’t feel like you have to buy shiny new pieces of gear for your new company. Look through used and refurbished listings. Purchasing your tools from existing equipment sales can help slash prices by more than half depending on the type of good being purchased. This is an especially good way for upstart landscaping and industrial firms to shave some money off their overall cost of ownership.

 

3. Don’t Make Purchases You Don’t Have To

It’s easy to get carried away with wanting to get every single new tool or service promoted by the business industry press, but you shouldn’t get caught up in this kind of advertising content. Seriously think about every purchase you plan on making, especially during your first year in business. There’s a good chance that you don’t need to make some of them. If you plan to run your business primarily online, then you might not need to make any at all.

 

4. Outsource Some of Your Departments

It’s unreasonable to think that smaller startup companies could ever keep enough staff on hand to do every job that has to get done. Consider hiring an outside IT department, working with a cloud based call center or even getting an accountant from outside your firm. Any of these options can help to dramatically reduce what you’re spending. Managers of companies also commonly look at this as a good way to reduce the amount of investment needed in physical facilities.

 

5. Use Comparison Shopping Tools

Whenever you have to make an important purchase for your business, make sure that you use a comparison shopping site first, because these can help you to find the best deals on nearly everything. If one retailer is selling something at a specific price point that seems too high to you, then there’s a high probability that someone else has it for less. Those who are already going to be shopping online will, once again, want to check out used listings in order to save even more money.

 

6. Make Equipment Purchases Late in the Year

Depending on where you are and how the tax structure works in your jurisdiction, you might be able to claim a deprecation loss if you make equipment purchases later on in the year. Take a few moments to figure out more about how the local tax policies work and then see if you can’t claim these losses depending on when you purchase equipment. While there are a few variables involved, you might even be able to do so when buying used equipment, so you could double up on the savings with a single purchase.

 

7. Switch to Open Source Office Apps

Since free and open source applications don’t have any real cost associated with them, you can save a lot of money by dumping your old office application subscription and switching to one. These are usually capable of editing all of the document formats you’d expect in spite of the fact that they don’t cost anything in terms of upfront costs. You’ll also have plenty of choices to pick through.

 

8. Opt for Paperless Billing

Subscription-based services will often offer discounts for customers who choose paperless billing, since this saves them the cost of actually having to mail bills out on a monthly basis. While you’ll want to seriously consider whether or not your firm needs the subscriptions that it’s signed up for, this is a good way to cut costs on the ones that you absolutely can’t run your organization without.

 

9. Call Your Wireless Provider

Nobody wants to have an uncomfortable conversation with the people that provide their cellular contract, but it’s important that you do if you plan on using your phone to make business calls. Be firm and find out if you can get a better rate. There’s a good chance that you can also get your Internet provider to give you a better deal as well, which is good news for those who plan on running their firms almost totally online.

 

10. Stop Jetting Around So Much

Travel expenses can get really high fast, so you’ll want to see which trips you cancel. If you can communicate with potential leads over the phone, then you should call them instead of jumping on a plane. Online meeting services can help you to stay in touch with all of your workers, and they’re a great choice for those who want to eventually transition their business into a model that’s friendly to those who want to work from home.

 

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.

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