When you practice sensible budget management at the beginning of your start-up venture,your business can definitely be set up for success. But where and on what should you be spending your hard-fought money, and when should you put your wallet away? We’ve listed the financial trade-offs you’d be smart to make below.
DO spend on:
After deciding that you need a physical space, but if creating a storefront or office is vital to the viability of your company (i.e. because you’ll actually be selling your product or service in those premises), then it pays to invest in aesthetics. For customers or clients, first impressions matter – so get savvy with your interior design skills and put some time and money into cultivating a professional and inviting space. However, do be practical about what you choose to invest in: hardy, top-quality furniture will serve you and your business goals for the long-term in a way that an office slide probably won’t.
- Logistical solutions
If you’re an interstate operator and need to be able to transport your product long-haul, then don’t spend all your money on truck and driver rentals. Instead, set aside a portion of your start-up capital for a dedicated business truck (or two).
And if you trade mainly between cities, you might even consider hopping on the e-truck bandwagon: electrically-powered trucks are the latest in transportation, and not only will they allow you to reduce your sum business emissions (an essential consideration for any start-up owner), but an e-truck will both show your care for the environment and save you fuel money in the long run.
- Professional help – when you need it
One of the hardest things to learn as an ambitious, just-out-the-door start-up owner is that you can’t do everything yourself. This is especially true of legal and financial matters. Getting legal aid and advice from accredited accountants and tax professionals,will ensure you build your business on a solid foundation with no nasty surprises on the way.
DON’T spend on:
- Non-vital vehicles
Transport trucks, you need: a bevvy of the latest signwrittenwork cars, you generally don’t. Many business owners report that their biggest unnecessary expense in the start-up stage was the overhead amassed by buying or leasing work vehicles.
- Glitzy gadgets
Don’t feel tempted to splash your start-up budget on the latest technology if it’s not essential to the creation of your product or service. If you’re formulating a new app, then you’ll need a fast and capable computer and the software to match. On the other hand, if you’re opening a bakery,then the money you’d waste on a fleet of the latest Mac laptops is much better spent on top-quality ingredients and kitchen equipment. When it comes to less-vital gadgets, shop second-hand wherever you can.
- Premature staff expansion
Although your staff will be your most important asset, you must be carefulnot tohiretoo many employees at the beginning of your venture. If you have too many people working for you before you have started making real profits, you won’t have the capital to sustain their salarieslong-term.
Along with starting small with your workforce, you might also consider outsourcing. For businesses that mainly operate online, hiring remote workers can get you the best deal as a boss, regarding both finances and quality human resources.
- Full-price goods
Many entrepreneurs enter the business world without realising that paying full-price for bulk materials and supplies is not the norm in most industries. Conserve your capital by getting your head around bartering and negotiating with your suppliers from the get-go – and take note that you boast a good or service that another company might accept instead of cash.
Article Written by Cloe Matheson