Categories: Tips

4 Creative Cost Reduction Tips for Startups

Saving money on your business overhead is like putting money directly into your pocket. As a small business owners are always looking for ways to make the most of their budget so they can classify as much of their revenues as possible as profit. As you probably know, cash flow is what is going to keep your start-up above water. To get more cash flow, you need to either sell more or cut back on expenses, and when you do not have a large book-of-business, cutting back is the most practical option.

Every business owner knows the basics of reducing overhead, but sometimes it takes a bit of creativity to reduce spending without compromising business solvency.

Go Green and Save Green

Going green has become the new trend in households as well as in business. You may be under the assumption that going green will require a major investment, but that is not the case. In reality, you can make your business more environmentally friendly without buying any type of special equipment. In fact, switching to online business software such as merchant accounts and mobile office applications can produce up to 65 percent less carbon than maintaining the same type of capabilities in-house.

Start shredding all of the old paperwork and use it as packing whenever you ship items. Use .PDF converters to send emails of your documents rather than faxing or printing. Print on both sides of paper rather than one. Turn off the lights and turn up the AC while you are out of the office. You will be amazing at how much green being eco-conscious can save you!

Less Travel, More Skype

You can never predict when gas prices are going to go up. If you regularly have meetings with colleagues and partners, you should consider cutting out the travel and using free videoconferencing tools. Not only is the software free for download, the programs are advanced enough that you can see, talk, and even share documents all from a remote location.

Buy Previously Owned Furniture

Once you start to price the cost of office furniture, you will quickly discover just how much that modern desk you love costs. You need ergonomic, space-saving furniture that has plenty of storage room, but you do not necessarily need to buy new when you are starting up. There are plenty of places that you can buy previously owned furniture that is in like-new condition. Search for going out of business sales and third-party sellers who have liquidation sales in your area and you can save thousands.

Hire Independent Contractors

Do you really know how much it costs to hire an employee? When you are starting off and building your business, it may be in your best interests to do everything you can on your own. You can do your own taxes, start your own marketing campaigns and handle ordering all of the supplies without an assistant at first. If you absolutely need help, you may want to consider hiring independent contractors as opposed to full or part-time employees. This will save you a great deal in payroll taxes and HR costs.

You can never completely eliminate overhead costs, but you can definitely trim the fat. If you want to gain a competitive advantage as a start-up, cutting operational expenses is a must. Get creative, be realistic, and budget properly. As your book-of-business starts to expand and your budget increases, you can come up with even more creative ways to save money.

About the author

Zoe Maldonado is a freelance writer and blogger for TechBreach who enjoys writing about all things mobile and electronic and spending time with her very active twin boys.

Deborah Sweeney

Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With extensive experience in the field of corporate and intellectual property law, Deborah provides insightful commentary on the benefits of incorporation and trademark registration. Education: Deborah received her Juris Doctor and Master of Business Administration degrees from Pepperdine University, and has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in corporate and intellectual property law. Experience: After becoming a partner at LA-based law firm, Michel & Robinson, she became an in-house attorney for MyCorporation, formerly a division in Intuit. She took the company private in 2009 and after 10 years of entrepreneurship sold the company to Deluxe Corporation. Deborah is also well-recognized for her written work online as a contributing writer with some of the top business and entrepreneurial blogging sites including Forbes, Business Insider, SCORE, and Fox Business, among others. Fun facts/Other pursuits: Originally from Southern California, Deborah enjoys spending time with her husband and two sons, Benjamin and Christopher, and practicing Pilates. Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Deborah, and MyCorporation, have previously been honored by the San Fernando Valley Business Journal’s List of the Valley’s Largest Women-Owned Businesses in 2012. MyCorporation received the Stevie Award for Best Women-Owned Business in 2011.

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View Comments

Carla devis says:

11 years ago at 6:10 AM

Well written post. Every new business needs lots of hard work sincere efforts and reduction of costs than the way they planned. You have given such useful tips to make it all easy and in a effective way. Thanks for these amazing tips. I got few new tips which I think really informative for me.