Being a startup is hard. You’re constantly trying to find ways to save money and cut costs. After all, every penny counts when you’re just getting started. As an entrepreneur, you know that you have to be strategic when it comes to business expenses. Spending too much can lead to financial ruin, but not spending enough can mean your business doesn’t have the resources it needs to grow.
You need to be aware of the common business expenses that startups waste money on. Here are 7 of them:
Renting Office Space You Don’t Need
When you’re first starting out, it’s natural to want to rent the biggest, baddest office space you can find. But chances are, you don’t need all that space. And pays to think long-term when it comes to your office lease agreement. If you have the option to sign a shorter lease agreement, do it! That way, if your business doesn’t take off the way you hoped, you’re not stuck with an expensive lease agreement for years to come.
Hiring too Many Employees Too Soon
One of the biggest mistakes startups make is hiring too many employees too soon. Yes, you need help! But bringing on too many employees before your business is ready can strain your finances and cause tension within your team. It’s crucial to find that sweet spot between too few and too many employees. And remember, you can always outsource tasks like bookkeeping, social media marketing, and web design if you can’t afford to bring someone in-house full-time.
Buying Furniture and Equipment Before You Need It
Another mistake startups make buying furniture and equipment before they need it—or worse before they can afford it! Just because Ikea is having a sale on office chairs doesn’t mean you need to buy 20 of them for your new office space! Start small and only buy what you need when you need it—you can always upgrade later down the road when your business is more established. Of course, you want your office to look presentable and professional, but there’s no need to go overboard. Sometimes, a simple grey office chair, a white desk, and a few plants are all you need to create a stylish and productive workspace. It’s not always about the aesthetics but the functionality of what you’re buying.
Paying for Advertising That Doesn’t Work
There are many different ways to advertise your business these days—social media, Google AdWords, radio commercials, TV ads, print ads, billboards…the list goes on and on! But just because there are many options doesn’t mean you should try them all at once—especially if you’re on a tight budget (which most startups are). The key is to figure out which forms of advertising are most effective for your target market and focus your budget there. Sometimes trial and error are necessary to figure this out—but it’s worth it in the long run because you’ll be able to get the most bang for your advertising buck.
Hosting an Office Party or Company Retreat
Yes, team building is essential—but hosting an office party or company retreat can be a very costly endeavor! If you’re trying to save money as a startup, consider scaling back on the festivities or skipping them altogether. Your team will still bond without spending hundreds (or thousands) of dollars on food, drinks, and entertainment.
Printing Business Cards and Flyers
In today’s digital world, do you really need printed business cards and flyers? The answer is probably no—most people will just throw them away anyway! Instead, invest in digital marketing efforts like search engine optimization (SEO), social media marketing, and email marketing. They’re much more effective (and cost-efficient) than traditional forms of marketing, like printing business cards and flyers.
Buying Coffee and Snacks for the Office
Keeping your team fed and caffeinated can be expensive—especially if you’re buying coffee and snacks from the vending machine down the hall or ordering lunch every day. If you want to save money as a startup, consider investing in a coffee maker for the office and stocking up on non-perishable snacks like granola bars, nuts, and dried fruit. Your team will appreciate having food available, and you’ll save yourself a lot of money in the long run!
Your business’s success depends on your ability to save money. Remember that even though it’s important to invest in your business, there are a lot of common expenses that startups waste money on. Knowing what they are can help you save in the long run! The more money you save, the more you can reinvest in your business and help it grow. So, don’t be afraid to cut costs where you can—your business will thank you for it later.