In 2015 new start ups increased by 4.6%. With so many new businesses, there’ even more entrepreneurs who need to bootstrap in order to survive. Running a bootstrapped business can present a number of obstacles money-wise, but can also a huge advantage for those who need to learn fast.
If you’re starting a business without any funding from outside sources, you have to be able to save money and grow your business. Here are some top tips on how you can keep your business thriving while you’re working on a budget.
One of the main ways startups can save money is by outsourcing tasks. Opting to outsource rather than build an in house team can save a lot of money, not to mention time and energy.
To create an in house team you’ll need to go through the recruiting process, create space for your new employees, as well as provide training opportunities so they stick with you.
On the other hand, all you need to outsource is to find a freelancer who is willing to do the amount of work you require, negotiate prices and timescales, and hire them. Pretty simple compared to the complex business of creating your own team – and the perfect solution for the bootstrapped business.
There are plenty of jobs you can outsource, meaning you can save money in all sorts of areas. From bookkeeping to website building, you can keep your business’ profile up without worrying about the price.
Hold off on the office space
On a similar note, if you don’t need to have an office, don’t force yourself into getting one! For businesses that need a physical presence (like shops) this is be something you can’t avoid. But if you don’t need one then there’s really no need to waste the cash.
Reduce your overhead and consider working from home until you’re getting enough business to need a bigger space. When you’re ready to move out of the front room you can start by looking at coworking spaces – a great way to save money on space but remain professional.
Having to lower your expectations probably isn’t what you want to hear when you’ve just started a business. It’s easy to expect the money to start flowing as soon as you begin the hard work, but unfortunately when you’re forced to bootstrap, your expectations of a huge office and scurrying workers is probably a little out of reach.
While it’s necessary to have a long term plan for your business, it’s also important to keep your realistic goals in mind too. Fanciful ideas of grand boardrooms and investments aren’t going to land you that killer client right now.
Create both a long term and a short term plan in order to keep goals for your business in line, and track progress steadily.
Pooling is a great idea if you already know people in your industry. This is when you and other businesses make an agreement to approach suppliers as a group, and promise to exclusively use their services. With the large amount of money coming their way, they’re likely to give you a good discount – saving you a decent amount of money.
This will take some effort in terms of grouping together similar businesses (essentially your competition) and convincing them to either change supplier, or approach the same supplier asking for a price reduction. This could seem risky for their business, so make sure your powers of persuasion are switched on!
When it becomes necessary for you to hire someone, look to the inexperienced. These are the group that are most underrated by companies that haven’t bootstrapped.
Both interns, new graduates and disabled workers are the most likely to lack experience, but don’t lack determination, talent and creativity.
Not only will you be saving money, but you’ll end up hiring a diverse team who will be able to bring different thoughts to your business. As long as you’re open to their new ideas and fresh take on business, your company will thrive in their hands.
Hire an accountant
If you really want to be able to know how to better your business, you need advice from someone who’s aware of your business’ budget.
Many assume an accountant is just a good way on saving on tax and knowing how your finances should be spent, but there’s a lot more to your accountant than that.
They’re an untapped pool of business advice that can help you save money and spend it in the right areas, so don’t underestimate them. Hire an accountant not only to find out the best business structure, tax advice and payroll information, but also to find out how your company can grow.
Are you at the front of a bootstrapped business? Leave your tips for saving money in the comment section below!
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We work very closely with our expert accountants to bring you the latest factually correct tax and accounting news. We also enjoy writing about small business news that we hope you find useful!