When you start a business, funds are limited. You need to know how to stretch your dollar the furthest to get your startup off the ground. Follow our tips to make frugal decisions for your new business. (Credit: ResourceSpace, Patriot Software, LLC)
Over thirty years ago, I quit my job to start a computer programming business. I can tell you firsthand that there’s nothing like seeing your startup idea come to life. Three decades later, my company, Patriot Software, is a successful business that provides online accounting and payroll software to U.S. small businesses.
Being your own boss is not exactly glamorous. In fact, it requires a huge amount of dedication, especially in your early years. As a new entrepreneur, you need to make smart spending decisions and save money where it counts.
Frugal business tips for startups
Being able to manage your finances is key to running a successful business. Try these frugal business tips to get your idea off the ground without breaking the bank.
#1. Choose your space wisely
When it comes to your products and services, there’s no doubt that you need to provide top-notch quality. But when you first start, your private work area could be a different story. You might have to sacrifice personal luxuries to work on growing your business.
Don’t be tempted to rent a fancy office or buy new furniture if it’s not in your budget. A decked out workspace does not translate into a successful company. In the early days of your business, put your money toward growing your brand, not your ego.
You can add extra perks once you’re making steady revenues. Until then, take advantage of free or cheap spaces available. I did when I was a young entrepreneur.
In 1986, I started assembling and selling computers in my 700 square foot home. A year later, my business partner and I moved into the basement of his dad’s factory since the rent was free.
Often, our small office floor would flood with about two inches of water. When that happened, we sat on our desks to program computers and make phone calls. There was a gas heater in the wall that rarely worked and no air conditioning. For walls, we hung blankets around our desks.
Needless to say, our first office was a little rough! Yes, there were times when the basement of a factory was not an ideal workspace. But, we were able to get the job done, grow our business, and eventually move into a much nicer office.
Keep in mind that your first workspace is likely temporary. As your business grows, you can upgrade your office. When you’re starting out, focus on the moves that will help your company rise.
#2. Keep your 9 to 5
Often, entrepreneurs are natural-born risk takers. But, quitting a steady job to try out your idea might not be the best financial move. You could get into serious debt if you’re not as successful as you anticipated.
Working a traditional job gives you time to make a business plan, save startup capital, and market your business. You also earn a paycheck to fall back on if your idea isn’t profitable.
Before I was a business owner, I worked as an engineer for a large manufacturing plant. The company put me on its fast track, and I was heavily involved in some state-of-the-art projects. Even though I was going places, being an entrepreneur was in my DNA.
I wanted to jump right into running a business full time. Instead, I continued working my corporate job. I went to the engineering job during the day. In the evenings and on weekends, I assembled and sold computers. One year later, I gave a resignation notice to my boss.
You will know when you’re ready to go all in on your startup. But if you’re worried about money, consider starting your company on the side. That way, you can build your business’s foundation without needing to turn a profit right away.
#3. Make smart marketing decisions
For your startup to gain customers, people need to know it exists. You have to market your new business to get people talking about your brand.
There are a lot of big marketing companies out there that can put your business in front of potential customers. But, outsourcing advertising and marketing is expensive.
As a small business owner, you don’t have to spend a ton of money on a PR firm. And, you don’t have to be a marketing expert to advertise your company. You can market your business for a fairly low cost using simple strategies.
Today, there are many user-friendly, inexpensive marketing tools available to small business owners. For example, you can create social media accounts and promote your business for free using social media marketing.