Starting a new business can be quite exciting. Unfortunately, you need money to get things up and running.
Of course, there are some costs that you just can’t get around, and these can vary between industries. But generally, you have expenses surrounding the entity you choose, any federal, state, county or city licensing – the list is long.
But you can still get rolling without breaking the bank. That’s the purpose of this article. We’re going to show you how to curb your startup costs for your new business.
1. What’s needed
Before you hang out your shingle, sit down and figure out everything you think you’re going to need to begin operation. Then, go through your list and see if there are any items you can either put off or do without, at least for now.
For example, having the latest, state-of-the-art computer would be great, but can you get by with your current computer until you have better cash flow to put back into the business? The savings could help you get to that point quicker.
Accumulating debt while building your business during startup can be very risky. Your business might survive a few months this way, but what if paying clients are a bit slower to come in than you anticipate? Keeping up with the necessities will be hard enough.
Don’t use credit cards like a crutch. If you have to use them, charge only what you can afford to pay off in a month without disrupting your entire financial picture.
There’s that word again! We can’t emphasize this enough, but a budget helps you to see what your financial picture is at any given time. And it’s not as hard as you might think. But if you don’t want to tackle it, try to find someone to help you.
Otherwise, it can all be done on a spreadsheet. And if you have MS Excel, you can find templates to make it easier. You can even customized the rows and columns.
If your business requires work trucks, you have two choices: buy or lease.
Buying a new work truck might be too much, especially for a new business. You’ll have a large deposit, high monthly payments, higher insurance, plus the usual upkeep and maintenance of the vehicle.
Leasing, on the other hand, is usually the more cost effective option. Flex Fleet is a company that can set you up. Your down payment and your monthly payment will be lower. Plus, leasing a vehicle can mean tax breaks. Contact your tax professional for more details.
Depending on your particular business, there could be a number of legal concerns to care for. Maybe you have those covered. But there’s a bit more to think about.
It costs nothing to get yourself familiar with some business law. At the same time, it could go a long way in saving you money. It comes down to this: The law that you are not familiar with could unnecessarily cost you money in the form of fines or penalties. The more you know, the more you could potentially save.
So you don’t need to lose your excitement for your new business just because you need to keep your startup costs at bay. This is a crucial time in the life of your business. How you deal with your finances at this stage will prepare your business for success, and preserve it alive while you work your way there.
We hope you found some benefit from this article, and more importantly, that it gets put to use.