Expenses are a part and parcel of every business, irrespective of whether it is online or offline. It is a fact that an online business has lesser operating costs as compared to its offline counterpart yet it is not completely absolved of expenses. While completely avoiding these expenses is not possible, business owners can put in some measures that can reduce them considerably without hampering the working and operations of the business.
Reining the expenses is especially essential for start-up business owners as they are just getting into the business with a new idea. Whether the startup business will kick up and roar is a matter of time but if the initial costs are high, then sustaining in this fierce and competitive work arena would be difficult. It is essential to have some controls in place that keep the startup going with reduced costs.
Here are a few tips that can be followed by startup entrepreneurs in reducing costs of business operations:
Manage office space prudently
Whether you have an online startup or an offline one, the primary requirement is that of office space. As an entrepreneur, you will have to decide what type of infrastructure you require for your business. You must try to accommodate and work along with a minimum of furniture and other essentials of an office when you are starting up your venture. This way you can startup even from a small space which usually carries a lower rent as compared to a large place that is expensive. Moreover, you must try to manage your office with minimum supplies that are required immediately and need not stock up on items that might be of use later on. Effective space utilization is the key to saving on the rent.
Outsourcing vs. In-house Employees
A startup entrepreneur must create a balance between getting the jobs done in-house and outsourcing. Getting the job done in-house means that you will have to maintain a team of workers that are given work constantly so that their productivity is equal or more than what is being spent on them. On the other hand, taking the services of freelancers is better as you are not committed to them on a budgetary basis. You hire them for particular projects and pay them accordingly.
It is not that you do not need permanent staff but their services should justify their salaries. You will have to invest money on the training, management and benefit packages of permanent staff which is not the case with freelancers. Therefore you need to create a balance between outsourcing work and getting it done in-house. Certain services like choose CMS development, payroll accounting, human resource administration, and marketing can be easily outsourced with the assurance that you are going to get professionals for the job.
Minimize the use of Office Supplies and Equipment
Certain office supplies and equipment are essential for any business. This includes stationery, printers, cartridges, inks, papers, and files to name a few. If you are able to cut down your costs on these items, you can consider half the battle won as these things might seem inexpensive but their quantity is what can increase the costs. Therefore, as a startup business, you must try to record and keep all work as a soft copy. Having documents as a soft copy will serve two advantages. Firstly it will save costs on filing and storing them physically as a large number of documents can be stored on a single hard drive. Secondly, you will be able to retrieve and access the documents more easily as compared to saving them as a hard copy.
If there are certain essential supplies required, you must turn to the online suppliers as they can provide you supplies and equipment at a much lower cost than their offline counterparts. In the case of the former, the overhead expenses are low and the business owners pass these benefits to their customers by way of lower prices. You can easily source all the required material from online stores and save money considerably.
Cost comparison and Better Services
Whatever the location or size of the business, there are certain essential expenses that are inevitable. Included in such expenses are utility bills such as internet, electricity, water and telephone services. In order to cut down on your expenses, you will have to restrict the use of all these essentials on the one hand and source them from affordable utility providers on the other hand.
You must choose devices that consume less power. Similarly, you must choose telephone and internet services that are affordable and that the resources are not wasted on unnecessary and expensive packages. It is better to shortlist a few services and then compare their features and prices. This way you will be able to get better services and save money as well.
Negotiate for Lower Prices
Negotiation is a skill that must be possessed by all business owners especially the start-up ones. It is because of your negotiation skills that you can look out for opportunities, lower rates, and better services at the same prices as that of others. Whether you travel a lot, stay at hotels or use certain services, you can negotiate with the vendors to lower the prices. All the money that you save on your business trips or otherwise, add up to be used for your business. This way you can lower the costs to an extent.
The idea is to cut down on the unnecessary expenses that seem a part of the business. But if you are vigilant and careful there are certain expenses that can be cut down and this is not just for the startup entrepreneurs but for all business owners in general. The money that is saved is money that is earned. Therefore, as a business owner, you must try to find new and innovative ways to conduct your business while saving on expenses. This will help you go a long way in competing against the otherwise established businesses.