Most first-time entrepreneurs are visionary in their beliefs, creative in their ability to solve problems, and tech-savvy. While these attributes are admirable, new business owners often lack one characteristic - the ability to save money. Today's guest blog looks at how to pull it off...
What does saving money matter when you have a great product or service that the public will be lining up to pay you for? Well, as we all know, that's not the way it goes. It can take time for your market to see the value in what you offer enough to put their money behind it. Until they do, it's up to you to keep your business afloat, which means that your ability to cut costs could be the difference between business success or failure.
50% of small businesses fail within the first two years, and it's not for lack of vision or drive. To keep yourself from becoming just another statistic, consider these five ways to save money on your new venture:
1. Do it all yourself
This may sound daunting, especially in the beginning, but it can be done. The more "hats" you wear as asmall business owner, the less money you'll pay out to contractors or staff, and the better you'll understand the different facets of your business and what's required. Thisexperienceis also a great way to ensure that you get what you're paying for when you hire outside help. For example, if it takes you two hours to do a specific job, but it takes an employee or contractor four, you may want to hire someone else.
2. Choose the right credit card
Handling credit poorly could be the death knell for your small business, but handling it well can save you money in the form of reward points or cash back. One card to consider is the Ink Classic Business Card by Chase. It offers 20,000 bonus points (worth $200 in rewards) after you make $3,000 in purchases during the first three months. Plus, it offers generous rewards points on communications, cable TV, and internet purchases, as well as hotel and gas purchases. The card also has no annual fee and a 0% introductory APR for the first six months. Just keep in mind that business credit cards are not protected by the Credit Card Act of 2009.
3. Buy used equipment
When outfitting your office, consider buying used equipment and furniture. You can find great deals on "gently used" computer products on eBay or Amazon, and Craigslist is a great resource for used furniture. Get the basics you need to do your job, and think about upgrading once you have a net positive cash flow.
4. Barter your professional services
In addition to the vendors and suppliers you work with already, network with other professionals who have services you need - and who need your services. Then, see if any of your contacts have an interest in mutually bartering for services. In this way, you can spend your time instead of money to get the things you or your business needs.
5. Market for free
Save the billboards and expensive direct mail campaigns for later, if you use them at all. Make it your mission to become an expert on the best and cheapest marketingavailable -social media. Open up accounts on Facebook and Twitter. Try LinkedIn, Google Plus, and Pinterest as well. Regularly monitor accounts - post fresh content, and respond to questions and comments promptly. Make the experience interactive by posting questions, initiating discussions, or conducting surveys. To create a buzz and generate more interest,offer incentives for participation.
Developing your business will probably be hard, but it won't be without reward. Implement cost-cutting measures like these in the beginning and as you get more accustomed to what your business requires. You can and should, for example, contract out those duties that simply take too much of your time. Or if you find that social media isn't quite getting the results you desire, investigate paid advertising. There's no perfect recipe for success and everyone's business is different. It's up to you to find out what works for yours. And by saving money from the get-go, you'll have a much longer time to figure that out.
How do you save money on your small business? Let us know...