“When money realizes that it is in good hands, it wants to stay and multiply in those hands.” ― Idowu Koyenikan
Small businesses and startups have been changing technology and the lives of people. They create opportunities for individuals to follow their passion, be their own bosses, and build an empire that can thrive in the future. However, with business comes expenses, and the most difficult thing startups deal with is saving money and lowering their expenses.
Starting with a constrained budget and limited access to capital, most startups who find investors go on a spending spree, hoping that their ideas will thrive. However, neglecting the cost-cutting programs they can incorporate, they are brought down in no time while their productivity yields a negative return.
In order to realize profit, generate revenues, and stay efficient, startups need to learn how to manage their expenses. Here we list the top 10 ways startups can reduce their expense in 2016.Advertising
1. Try cloudsourcing
Several studies have shown that startups that do their own hiring spend more than those who outsource their work. Reports say that it costs around $4,000 to find and hire a new employee, and the time and money spent on training, vacation, and insurance costs way more.
Many small businesses and startups who want to optimize their budget need to start cloudsouring their work to compete with others. The process involves hiring qualified professionals who work remotely and even at a cheaper salary compared to traditional employees. You can find people on platforms like Elance, Freelancer, and Upwork according to your need and you don’t even need to have them on a full-time payroll.
2. Lease what you need
Startups and small businesses often tend to spend more on office needs. However, leasing all the items that are necessary can save a lot of money. Items including factory equipment, computers, desks, and tables can be found on lease at several marketplaces.
3. Hire interns
You might not find a suitable cloud worker or you might require someone who is available when you need them right in front of you. In that case, you can call your local college or business trade school and see if there are students looking to work as interns. Many college students, despite having the qualifications, aren’t able to find an internship. This is where you can get your job done while also helping them to fulfill their school credits.Advertising
4. Go inexpensive, but not cheap
Many entrepreneurs and small business owners spend a lot of money on services like marketing, web design, and software development — and end up regretting it later. There are countless numbers of tools that are cost effective and handy for business owners looking to save their money.
Tools like Moto CMS help you create a great-looking website, and using BaseCamp and Trello to manage employees can help you cut down on your expenses by a lot.
“Free tools can be a bad idea — they’re free for a reason,” says Raad Mobrem, CEO and co-founder of Lettuce Apps. Try finding items that can get your job done and won’t cost you more in the long run.
5. Try new advertising
Advertising is a must for any kind of small business or startup today. From connecting with people to finding customers, advertising plays a big role in success. However, if you depend on traditional advertising forms, including print, television, or radio, the budget is surely going to rise.Advertising
To stay on budget and cut a lot of money, you need to take time and invest on digital media. You can start a blog and start promoting it through social media. Opening up a page on Facebook and Twitter is not going to cost you anything and this will cut your advertising expense completely.
6. Shop around for insurance
Startups need to minimize their insurance costs, especially during the renewal time, as this can eat up a lot of your budget. Start with finding and comparing insurance policies, and if you don’t have time, seek out an independent agent or a good lawyer who can help you with your insurance needs. They are not financially bound to any company and they can help you find great rates based on your needs.
7. Don’t buy in bulk
You read that right. What most businesses and startups do is buy office supplies in bulk, thinking that it’ll help them lower the cost. However, imagine buying a thousand markers — is that really necessary? With several online shopping and e-commerce sites on the web, startups can get confused about what exactly they need. Searchub, an innovative e-commerce platform that uses machine learning algorithms, offers users a truly personalized shopping experience.
Well, your cost per marker is surely going to be less when you buy it in bulk, but will you ever use a thousand markers? You’ll either lose them or they’ll dry out before you even start using them. Spend for the time being and avoid getting things you don’t require immediately.Advertising
8. Cut financial charges
Many small business and startup owners spend thousands of dollars on expenses that are not essential at all. For example, think of the cost that can come with late payments on loans, membership fees on business credit cards, and processing fees. You need to stay on top of your bills and pay them right when they are due. Seek online payment services if you find balancing your personal checkbook difficult.
9. Evaluate and re-evaluate
Take a pen and a paper and write down everything you require to build your startup. From office supplies to furniture, employees, internet, insurance plans, electricity, communication costs — everything. Evaluate your needs and look out for options. For example, you can save the money needed for paper if you use your computer to store your information. Also, choose free plans like Skype and Gmail to communicate. Rethink your needs and see if there are any ways you can cut your costs.
10. Don’t waste time
When you are in business and working with startups, you seriously need to understand the value of time. As an entrepreneur or a small business owner, you put in a lot of hours, and if you waste your time, it can cut your sales and hurt your business. The more you manage yourself, the more effectively your business will run. Stop procrastinating from day one and get on the right track to save a lot of your expenses.
Featured photo credit: stevepb via pixabay.com
Published on November 20, 2018
The Best Ways to Save Money Even Impulsive Spenders Can Get Behind
The truth is, there are many “money saving guides” online, but most don’t cover the root issue for not saving.
Once I’d discovered a few key factors that allowed me to save 10k in one year, I realized why most articles couldn’t help me. The problem is that even with the right strategies you can still fail to save money. You need to have the right systems in place and the right mindset.
In this guide, I’ll cover the best ways to save money — practical yet powerful steps you can take to start saving more. It won’t be easy but with hard work, I’m confident you’ll be able to save more money–even if you’re an impulsive spender.
Table of Contents
Why Your Past Prevents You from Saving Money
Are you constantly thinking about your financial mistakes?
If so, these thoughts are holding you back from saving.
I get it, you wish you could go back in time to avoid your financial downfalls. But dwelling over your past will only rob you from your future. Instead, reflect on your mistakes and ask yourself what lessons you can learn from them.
It wasn’t easy for me to accept that I had accumulated thousands of dollars in credit card debt. Once I did, I started heading in the right direction. Embrace your past failures and use them as an opportunity to set new financial goals.
For example, after accepting that you’re thousands of dollars in debt create a plan to be debt free in a year or two. This way when you’ll be at peace even when you get negative thoughts about your finances. Now you can focus more time on saving and less on your past financial mistakes.
How to Effortlessly Track Your Spending
Stop manually tracking your spending.
Leverage powerful analytic tools such as Personal Capital and these money management apps to do the work for you. This tool has worked for me and has kept me motivated to why I’m saving in the first place. Once you login to your Personal Capital dashboard, you’re able to view your net worth.
When I’d first signed up with Personal Capital, I had a negative net worth, but this motivated me to save more. With this tool, you can also view your spending patterns, expenses, and how much money you’re saving.
Use your net worth as your north star to saving more. Whenever you experience financial setbacks, view how far you’ve come along. Saving money is only half the battle, being consistent is the other half.
The Truth on Why You Keep Failing
Saving money isn’t sexy. If it was, wouldn’t everyone be doing it?
Some people are natural savers, but most are impulsive spenders. Instead of denying that you’re an impulsive spender, embrace it.
Don’t try to save 60 to 70% of your income if this means you’ll live a miserable life. Saving money isn’t a race but a marathon. You’re saving for retirement and for large purchases.
If you’re currently having a hard time saving, start spending more money on nice things. This may sound counterintuitive but hear me out. Wouldn’t it be better to save $200 each month for 12 months instead of $500 for 3 months?
Most people run into trouble because they create budgets that set them up for failure. This system won’t work for those who are frugal, but chances are they don’t need help saving. This system is for those who can’t save money and need to be rewarded for their hard work.
Only because you’re buying nice things doesn’t mean that you’ll save less. Here are some rules you should have in place:
- Save more than 50% of your available money (after expenses)
- Only buy nice things after saving
- Automate your savings with automatic bank transfers
These are the same rules that helped me save thousands each year while buying the latest iPhone. Focus only on items that are important to you. Remember, you can afford anything but not everything.
How to Foolproof Yourself out of Debt
Personal finance is a game. On one end, you’re earning money; and on the to other, you’re saving. But what ends up counting in the end isn’t how much you earn but how much you save. Research shows that about 60% of Americans spend more than they save.
So how can you separate yourself from the 60%?
By not accumulating more debt. This way you’ll have more money to save and avoid having more financial obligations. A great way to stop accumulating debt is using cash to pay for all your transactions.
This will be challenging, depending on how reliant you are with your credit card, but it’s worth the effort. Not only will you stop accruing debt, but you’ll also be more conscious with what you buy.
For example, you’ll think twice about purchasing a new $200 headphone despite having the cash to buy them. According to a poll conducted by The CreditCards.com, 5 out of 6 Americans are impulsive spenders.
Telling yourself that you’ll have the discipline to not buy things won’t cut it. This is equal to having junk food in your fridge while trying to eat healthy–it’s only a matter of time before you slip. By using cash to make your purchases, you’ll spend less and save more.
A Proven Formula to Skyrocket Your Savings
Having proven systems in place to help you save more is important, but they’re not the best way to save money.
You can search for dozens of ways to save money, but there’ll always be a limit. Instead of spending the majority of your effort saving, look for ways to increase your income. The truth is that once you have the right systems in place, saving is easy.
What’s challenging is earning more money. There are many routes you can take to achieve this. For example, you can work long and hard at your current job to earn a raise. But there’s one problem–you’re depending on someone else to give you a raise.
Your company will have to have the budget, and you’ll have to know how to toot your own horn to get this raise. This isn’t to say that earning a raise is impossible, but things are better when you’re in control right? That’s why building a side-hustle is the best way to increase your income.
Think of your side-hustle as a part-time job doing something you enjoy. You can sell items on eBay for a profit, or design websites for small businesses. Building a side-hustle will be on the hardest things you’ll do, be too stubborn to quit.
During the early stages, you won’t be making money and that’s okay. Since you already have a source of income, you won’t be dependent on your side-hustle to pay for your expenses. Depending on how much time you invest in your side-hustle, it can one day replace your current income.
Whatever route you take, focus more on earning and save as much as possible. You have more control than you give yourself credit for.
Transform Yourself into a Saving Money Machine
Saving money isn’t complicated but it’s one of the hardest things you’ll do.
By learning from your mistakes and rewarding yourself after saving you’ll save more. What would you do with an extra $200 or $500 each month? To some, this is life-changing money that can improve the quality of their lives.
The truth is saving money is an art. Save too much and you’ll quit, but save too little and you’ll pay for the consequences in the future. Saving money takes effort and having the right systems in place.
Imagine if you’d started saving an extra $100 this next month? Or, saved $20K in one year? Although it’s hard to imagine, this can be your reality if you follow the principles covered in this guide.
Take a moment to brainstorm which goals you’d be able to reach if you had extra money each month. Use these goals as motivation to help you stay on track on your journey to saving more. If I was able to save thousands of dollars with little guidance, imagine what you’ll be able to do.
What are you waiting for? Go and start saving money, the sky is your limit.
Featured photo credit: rawpixel via unsplash.com