How You Can Control Costs for Your Start-up

It is wonderful when you start out on your first entrepreneurial venture. You have your team ready, a product or service idea in mind, have the necessary infrastructure and the budget to ensure you stay afloat during the initial phases of your business while you are still trying to get clients and trying to get that proof of concept that you need. Even if you have moved on to the second phase of your start-up and have starting to turn a profit, controlling costs is always something that is at the back of every young entrepreneur’s mind. And the fact is, it should be.

Why are Controlling Costs Vital?

While there are certain core areas of your business that absolutely require you to invest in, there are several aspects where you can stand to cut down. There are many ways that a business, both large scale, and small scale can reduce their operating costs and invest that money where it is really needed. In this article, we will further discover some ways that cost reduction can be achieved in your start-up.

Some Cost Reduction Methods:

1)    Cutting down on rent

Depending upon the size of your team, try to get an office space for rent that takes care of your basic requirements. Do not go overboard with a big fancy office initially to try and impress clients. If a majority of your business is conducted over the phone or online, there is no need for a big office space just yet. You can hold on that till your business needs to expand. Until then, the money you save on rent would go a long way if invested towards improving product or service quality.

2)    Make Bulk Purchases

Buying in bulk gives you the benefit of the economy. You can get the goods at a reduced price. Whether it is office supplies that you know your employees will require on a regular basis or goods needed for manufacturing your product, buying wholesale or buying in large quantities will lead to reduced expenditure on those products in the long run.

3)    Outsourcing Non-core functions

Let’s be honest, not every function of your business needs to be handled in-house. Your business might be more productive if you choose to outsource certain functions of your company. For example, many businesses that provide services outsource their customer service functions to companies that provide call center services. This helps them reduce the cost of operations by not having to hire an extra team for that purpose and spending on extra infrastructure for them.

4)    Automate Repetitive Processes

There are so many business-related processes that are carried out at a regular interval in a business that is just repetitive or redundant. These processes can include accounting, payroll, and various other administrative tasks. By automating them, not only does your business save on costs but also save precious time that your team can spend doing something more productive.

5)    Find Organic Ways of Marketing

Paid marketing whether digital or otherwise is essential for any business. However, organic ways of online marketing can be more effective sometimes. Using social media and other online platforms like content sharing platforms like Quora or Medium can lead to greater traffic to your website and can help you gain better quality leads than paid ads. Capitalizing more on these organic channels will lead better results and reduce your expenditure on marketing.

These are some sure-shot ways that you can cut down on the operating costs of your business whether you operate a start-up or even an established organization. A business that utilizes its capital in a smart way has a better chance at success.