You’ve likely heard the statistic that half of all businesses fail in the first five years. What you might not know is why. While there are a number of follies that can tank a fledgling business, like too much competition, too little demand, or poor management, the number one reason that new businesses fail is due to cash flow problems.
If you want to avoid cash flow problems in your business’s first years, the smartest thing you can do is spend conservatively. What does that look like? Here are five smart ways to keep a small business’s startup expenses in check.
Be an office supply bargain hunter
Waiting until you’re out of supplies and buying wherever is most convenient is a great way to overspend on office supplies. Instead, buy online so you can search for the lowest prices on the supplies you need. Whether you need inexpensive basic like pens and printer paper or workspace essentials like ergonomic office chairs and office furniture, you’ll find the best deals when you use savings-focused sites like Rakuten to guide your purchases.
Buy refurbished tech
Buying refurbished computing equipment is a great way to save money without sacrificing functionality. That’s especially true when it comes to equipment like computer monitors and printers, which don’t change much year to year, but you can even buy newer-model computers at steep discounts by looking for A-grade refurbished products.
Here’s another tip for saving on office computers: buy desktops. While laptops have the perk of portability, once a laptop starts having performance issues, there’s no option but to replace the entire device. With a desktop PC, on the other hand, you can upgrade individual components to extend the life of your technology.
Opt for open source
Once you have your office computers set up, there’s another expensive obstacle to overcome: installing operating systems and software. If your devices didn’t come with operating systems, consider running Linux. As an open-source operating system, Linux is totally free, offering major cost savings over the comparably expensive Windows 10.
While Linux doesn’t come with all the same trimmings as Windows, you can save money on office basics, too. Google Docs, LibreOffice, and WPS Office are just a few of the free alternatives to Microsoft Office. As for more specialized software needs, opt for software-as-a-service (SaaS) applications. SaaS tools operate on a subscription model so there’s no need to spend a large sum on software purchases.
Build your own website
A web presence is non-negotiable for today’s small businesses, but what if you don’t have the funds to hire a professional web developer? While not a long-term solution, DIY website builders are an affordable way to get your business online. With drag-and-drop templates and easy-to-understand hosting and domain purchasing, business owners can build a basic informational website in a few hours.
Upgrade technology as you can afford it
While these four cost-saving solutions help your business get up and running, eventually you’ll need to upgrade your small business’s technology in order to stay competitive. These are some upgrades to plan for in your business’s first few years:
- Business laptops: America’s workforce is increasingly mobile. If your team needs to be productive on the go, purchasing business laptops is a more secure choice than a BYOD policy. Instead of buying high-powered laptops, look to inexpensive, highly portable options like Chromebooks.
- Collaboration tools: As your team grows, it will become harder to keep everyone on the same page. Collaboration tools like Slack, Basecamp, and Asana simplify project management and workflow so your company runs smoothly.
- A professionally designed website: A basic website ensures customers don’t draw a blank when Googling your business’s name, but it won’t do much to drive sales. If you want to make your business website a profit engine, you need a professionally designed website that reflects your brand and works on any device.
A conservative approach to startup purchases means you won’t be running the top tech right out of the gate. However, saving money at the start is a small price to pay for long-term financial viability. By minimizing startup expenses and upgrading as cash flow allows, you protect your fledgling business from the top cause of startup failure.
Image via Pexels