For startups, you must keep a firm eye on costs. Because initially, you have to build everything from scratch, it can be very easy to slowly but surely lose control of your finances. Here are five simple tips to help you keep your startup’s costs low.
1. Fool-Proof Your Business Against Fraud
Corporate fraud can not only destroy a firm’s reputation but can also lead to expensive lawsuits and penalties. Keep your systems impeccable to prevent fraud. One of the key ways of doing this is to opt for account verification. Account verification enables firms to verify the validity and ownership of customer bank accounts. It promotes security by making sure cash goes to and comes from the right person or business. Opt for account verification technology from a reputed vendor such as Envestnet | Yodlee. The firm’s account verification solution meets all NACHA rules for screening online payments to deter fraud and verifies account information in real-time.
Remember, the government can slap you with heavy financial penalties for non-adherence to regulations such as Anti-Money Laundering (AML) and Know Your Customer (KYC). Account verification software ensures compliance with the above regulations, thus saving you from expensive penalties.
2. Leverage Technology and Automation
You can leverage several technological advances from the last few years to lower your firm’s costs. Opt for teleconferencing where possible, for example. You can also use cloud-based services and remote desktop applications. In addition, you can invest in digital invoice and payment platforms.
Automation can save not only time but also money as you might end up needing to hire fewer employees. Automate processes that you need to do often.
3. Down-Size on Space
Remote work is here to stay. Look into downsizing to a smaller office or go fully remote to save on expensive leases. You can also look into co-working spaces until your business is up and running.
4. Keep a Budget and Consolidate Your Debts
Take stock of your assets and expenses and come up with a budget. Then stick to it! Giving yourself a fixed budget enforces discipline and also makes you find creative ways of finding a solution instead of just throwing money at a problem.
Also, consolidate your debt. Get rid of credit card debt to avoid expensive late fees and interest rates that can make the debt grow alarmingly and exponentially over months and years.
5. Purchase in Bulk and/or Purchase Refurbished
Where possible, opt for bulk purchases. This can include supplies, software licenses, and services around the office. Also, buying refurbished hardware, equipment, and office furniture can save you a lot of money. For big-ticket items, buy only what you need, and not in bulk!
With the help of the tips above, you should be able to maintain an iron grip over your expenses. Managing to stick to your budget is half the battle won. When your business has a strong foundation of controlling expenses, it is easier to forge ahead and build on this early win.