Starting a business is an expensive endeavor. Overhead costs like advertising fees and rent can be extremely taxing. However, there are ways to reduce these costs so you can launch your business on a financially healthy note.
To help you, we asked a panel of Forbes Business Council members to share some ways businesses can save money when they’re first starting out. Here’s what they had to say.
1. Follow The 80/20 Rule
The 80/20 rule, also known as the Pareto Principle, states that for many events, roughly 80% of the effects come from 20% of the causes. If you apply it to your business, you will also notice very powerful changes. Make sure you always focus on what is working best, and what is taking you the least amount of time. That way, you can always optimize your time and get more income. – Kevin Leyes, Team Leyes
2. Automate Data Entry
Data entry work is expensive and workers dread it. A simple macro can automate data entry for your business. With a click of a button, you can save the headcount of one or two employees and have these tasks done in seconds versus hours. Put an ad on craigslist seeking an Excel or Google Sheets guru, show them your monotonous data work or reports and see what they can do about automating these tasks. – Jesse Shemesh, Point Acquisitions LLC
3. Follow The ‘MVP Approach’
Some businesses feel the need to start with a bang and have all functions, features, etc. available from day one. But the reality is that most don’t have that kind of capital. I believe in taking a minimum viable product approach and start with the bare minimum to prove your business concept, then test different things, take what sticks and build upon that. This can reduce unnecessary start-up expenses. – Manju Mohan, Ionixx Technologies Inc
4. Focus On Revenue Per Employee
In order to reduce overhead and save money, the company needs to focus on new metrics that are getting popular in startups. It’s known as revenue per employee. If your average revenue per employee is lower than your expense, then you can focus on maximizing the potential of how to increase that revenue by strategically coming up with fresh ideas and implementing them. – Udit Goenka, Little SaaS, Inc
5. Partner And Outsource
Keeping overhead in check is a competitive advantage for any business, especially when you are new. New businesses should focus on their core mission and outsource as many support functions as possible. By focusing on your core business and letting partners and vendors provide the collateral support functions, you only pay for services when you need them versus incurring a fixed cost of hiring. – Reena Bhatia, ProposalHelper
6. Leverage Available Experts
We live in a gig economy. Telling your story clearly and consistently leveraging the myriad of experts who are available from marketing outsourcing applications can help you get leads and traction for growth without breaking the bank. There are also tools for marketing automation that are easy to use and affordable for new businesses to get to market faster and boost brand awareness. – Heather Newman, Content Panda/Creative Maven
7. Adopt A BYOD Policy
Having a “bring your own device” policy for the phone service, with an allowance given to the employee for using their own device, reduces costs for the business and maintains the employees’ device preferences. Another option is providing a second phone number paid for by the company, which can be connected to the employees’ device, again providing employees with an allowance to cover data. – Josee Larocque Patton, The HR ICU
8. Cut Traditional Advertising Costs
We can definitely save money by reducing a few expenses in the following ways. Cut traditional advertising in favor of low-cost alternatives. Employees are essential to getting work done, but employee costs—from salaries to office space to insurance—can be the biggest chunk of a small business’s budget. Hence outsource work to contractors to reduce additional costs. Keep your meetings lean. – Kiara Cancer, Extraordinary Headhunters LLC
9. Align Operations Costs With Usability
Your company may be paying for a lot of essential services including telecommunications, data management, automated tools, cloud storage, bookkeeping, etc. Review these services on a regular basis to determine whether they are still needed. This ensures you are paying for exactly what you need. – Beth Worthy, GMR Transcription Services Inc.
10. Hire Freelance Sales Help
Often, a new business is still finding its go-to-market niche in the first few years of operations. That usually means trying a few different channels, customer types, or markets to see which gains traction. I’ve found that hiring freelance sales or business development people can be a great option during these formative years. Often, they come with a wealth of industry or customer knowledge. – Yuval Shalev, Hunterz.io
11. Research And Implement Best Practices
One of the best ways to reduce overhead and save money is by researching best practices, technology tools and getting advice to make things more efficient. Saving money lies in the processes and systems you implement and efficiency paves the way. – Jacqueline Camacho-Ruiz, JJR Marketing Inc.
12. Listen Attentively
Listening attentively, especially in meetings, saves time and money. A VP of ops cut out three hours of meetings per week when she fine-tuned her listening. Decisions were made more quickly, issues were resolved more completely and her team stopped wasting time when they stopped having the same conversations over and over. It’s free and it’s effective every time. – Eric Kaufmann, Sagatica
13. Own Your Own Office
Every business has its ups and downs, and cash flow can sometimes present itself as a real challenge. When you own your own office, you can leverage equity and finance terms to readjust your monthly overheads. For example, if your office loan has 10 years left on it, you could refinance it over 15 years with a reduced fixed term interest rate, which could immediately save you thousands. – Nader Luthera, FURM GROUP LIMITED
14. Tap Into The Gig Economy For Non-Core Services
Technologies like RPA and ML provide unique opportunities to reduce costs and help companies scale. Human capital is one of the largest costs in a business. Leveraging the gig economy and platforms like Uber and others is a way for consumers and businesses to outsource and leverage non-core services and capabilities to support their business. – Raazi Imam, Sia Partners
15. Operate A Remote Team
I would recommend thinking about a remote team that can do some duties online. For example, in our business, we have just a few people in the office in London while all the rest are located in different counties. We have developers from Russian, customer support from South Africa, Eastern Europe and other countries. – Julia Ponomareva, eMop LTD