One of the biggest challenges you’re likely to face as a start-up is having limited resources in the early days meaning you have to do everything on a budget.
In the early days it can be very tempting to go on a spending spree when the core focus should be to create pay stubs above all else; but often we feel the need to launch a fancy website, travel in business class, lease a car as a statement of our success, before we’ve even begun to make profit.
You’ll find two of the most fundamental ways startups can save money in the early days by shifting their paradigm from the need to impress to focusing on what really matters.
START OFF WORKING FROM HOME
A common mistake many early stage businesses make is to straight away secure premises; often motivated by wanting to look the part, feel the part, and have an address that positions them as a respectable company.
It’s understandable and there are clear commercial benefits to having professional premises with a well reputed address; yet this isn’t necessary to your businesses survival and can put a significant strain on your start-up budget.
Your premises need to be fit for purpose so that you can perform and produce output; for instance if you’re launching a food business you might feel you require a commercial kitchen, but ask yourself whether you actually need a commercial kitchen, or whether, for now, you could start from your home kitchen and just invest in a few extra freezers for example.
The point being that there’s always a cheaper alternative to getting swanky premises, and the money you save could be much better utilised on core business and income generating activities.
STOP TRYING TO IMPRESS
It’s very tempting and understandable to feel the need to impress other business people with symbolic statements of success such as pulling up in a fancy car or signing a business contract with a Mont Blanc pen.
The truth is, however, most people don’t respect this stuff anymore. Indeed, millennials have changed the stuffy face of business to the point that turning up with a bic biro and holes in your trainers, at least in the tech community, can be more endearing to investors than someone dressed to impress. There’s something more authentic about the way startups go about doing business today – there’s less puffery and pretence.
Sometimes, however it can be important to make a good impression, and it makes sense to find entrepreneurs lining the coffee lounges of five star hotels rather than sat in McDonald’s car park.
It’s all about keeping perspective and focusing on what really matters; you will earn someone’s respect by creating value to that person – not by pulling up in a fancy car or wearing an expensive suit. Indeed, the best, and perhaps only way to truly earn respect as a startup is to focus on creating value… as, in business, that’s all people really care about.