A budget is nothing more than a formal plan that estimates your company’s probable income and expenditures for a specific period. As an entrepreneur, creating a budget can help you identify an efficient and effective strategy to make money. Equally important, a budget will help you ascertain the amount of cash you’ll need. This dollar amount will determine whether you must seek outside financing or can go it alone, investing your own money into your business. The latter approach is known as bootstrapping. If you have the resources and decide you’re willing to be on the hook for every penny that’s invested in your business, here are five cost savers to help you do so.
Work from a virtual office.
A bricks-and-mortar office is a luxury most startups can’t afford and many new businesses don’t need. Unless your company requires a physical location, such as a retail store, you can locate it in a basement, garage or spare bedroom. Founders of well-known brands, such as Apple, Amazon and Disney, initially operated their companies from a home base, and they did so quite successfully.
Online collaboration tools make communicating with others from your virtual office a snap. A few of your many options include Slack, an instant messaging tool; Skype, software for voice and video communication; and Basecamp, project management software.
Make use of low-cost software that’s accessible via the cloud.
Not only has the Internet made physical office space a superfluous asset, but it also makes available no-cost or inexpensive alternatives to software you purchase from big name companies, such as Microsoft. To meet a large portion of your software requirements, no-cost or low-cost options are available via the cloud.
Hosted software in the cloud grants you the use of software to support your company’s day-to-day business functions, while eliminating the need to purchase, configure or maintain servers.
Whereas hosted software, such as Dropbox, supports your file-sharing and backup needs, the functionality of Google Docs applications are similar to those of Microsoft Office. In turn, Adobe Creative Suite is a low-cost, hosted version of the offline Adobe software.
Also, the Zoho platform is a hosted software suite of integrated tools to conduct small business processes, including sales and marketing, email, finance, collaboration and human resources. In addition, Amazon Web Services can host your customer-facing apps in the cloud.
Hire only to support a core competency.
Initially, independent contractors can provide most of the manpower your startup will require. Therefore, unless you need a direct employee to execute a company core competency, rely on contractors.
By hiring contractors, you employ experts on a temporary basis when necessary, rather than add a member to your staff for the long term. You may pay more per hour for experts, but they’re likely to produce an end product faster, and ultimately at lower cost, than one produced by a junior staff member. If you can identify an expert who can fulfill multiple roles, all the better.
Market your products and services using social media platforms.
Free and low-cost marketing tools, such as Facebook, can be quite effective. Select two or three social channels, such as Twitter or Pinterest, and a social monitoring tool, such as Hootsuite, then use them to build a community that will evangelise your business.
Using social channels to market your offerings may take a few hours each week, but it can be time well spent. Hootsuite will allow you to queue up several posts for the social platforms and you can use other sites to create newsletters free of charge. In turn, the Mailchimp service will distribute newsletters to individuals on your mailing list at a low cost. A social content marketing plan can cost as little as $125 a month. But if you execute the plan properly, you will create a community that will promote your business.
Create the illusion of a “big” business
It’s likely your startup’s resources are limited. Consequently, you’ll need to find imaginative and inexpensive ways to appear to be one of the “big-boy” companies that will be around for the long term. To achieve this goal, you’ll need a web presence that offers clear and informative data. Also, all contacts with your company should be made via your company’s domain. A Google email won’t do.
Being a small business provides you the opportunity to operate on a shoestring budget, an option a big business doesn’t have. If you make use of free and low-cost tools that are available, such as Google Docs and cloud platforms, you can bootstrap your startup, operate on a limited budget and still provide a great product or service.