The decision to create your own startup business is a momentous step that will transform your life in wonderful and crazy ways. You will no longer be a worker drone – you’ll be an entrepreneur. You’ll be taking your career, your financial future and your life into your own hands. You’ll be creating your own opportunities in a fast-paced and unforgiving climate. Whatever the nature and size of your business, your startup is likely to require a decent amount of necessary overheads. Whether your business has a physical location or not, it will need equipment, manufacturing (on some level), delivery costs and other non-labor costs in order to get off the ground.
The trouble is that these costs can often hobble nascent businesses by tying up all of their capital and denying them necessary cash flow. Thus, savvy entrepreneurs would want to plan and prepare to have what they need to start operating in earnest while driving down unnecessary overhead costs.
The importance of liquidity and why startups don’t have it
Liquidity, or cash flow, enables businesses to stay agile and make decisions like investing in new technology or moving to a better location. Tying up all of your capital in overhead costs will inhibit your ability to do this, and this could cost you something far more valuable than money… opportunity. While overhead costs are inherently necessary, there are ways in which savvy entrepreneurs can help to drive them down.
Share space
When envisioning your startup, you might fantasize about a pristine office fully stocked with luxurious, affordable office chairs, desktop-thin client PCs, inspiring wall art and all sorts of cool amenities. Unfortunately, overhead costs of such an office could be crippling to a business still finding its feet. Sharing office space can be a neat way of mitigating overhead caused by office space, and you may even find that you’re afforded more flexible rates, too. If you only need a desk from which to operate, hot desking may be an affordable alternative to pricey office space.
Buy in bulk
While conventional wisdom dictates that startups shouldn’t tie up all of their capital in stock, sometimes there are bulk purchases that are too good to miss. Buying in bulk saves money in the long term and allows you to pass savings along to your customers and clients. This will make your business more appealing to shrewd customers who want to save money and afford you opportunities to upsell and bundle sell.
Consolidate services
When you’re starting out, it’s fairly easy to save money by consolidating services like utilities, phone and broadband using the same provider.
Store in the cloud
Larger companies tend to store their data in expensive in-house servers. For many startup businesses, however, this is a fairly unnecessary expense. Instead of forking out for this massive overhead take your data storage needs to the cloud. With so many companies out there offering secure, flexible data storage solution you needn’t sacrifice security for affordability.
