The Essential Guide To Being A Frugal Entrepreneur

Bah humbug! While Ebenezer Scrooge has a pretty poor reputation when it comes to his personal relationships and philosophy on life, when it came to business he was an astute and successful man. While you won’t want to commit twenty-four hours a day to your startup, forego any meaningful long-term relationships or stop seeing your family, you do want to save as much money as humanly possible as you launch your business idea. Funding is hard to come by, and you don’t want to be flippant with the cash flow that you have secured. You need to learn the art of spending money on the right priorities and saving the pennies as and when you can.

Being frugal is a sensible approach especially when first launching your startup. You don’t have the luxury of an outstanding reputation to fall back on yet, you need to find your place in a possibly crowded market, and you will need to find a competitive edge. Doing this while trying to secure your all-important funding, locate premises from which to base your startup as well hiring the right people to give your business the skills needed to succeed is a challenge. Being an entrepreneurial novice makes the barriers seem even greater and a bigger hurdle to overcome. However, by following this guide, you will be able to emulate the best bits of a startup Scrooge and save your business ridiculous amounts of cash.

Open Source It

While you may think that you need the latest editions of industry software to compete with your rivals, you should think again. With an array of open source, free cloud-based software available to all, you can take advantage of lower cost alternatives. For example, if you are planning on exploring the competitive world of wedding or commercial photography, you may assume that you need the latest Adobe Photoshop package. However, by taking a quick look online, you should be able to find free alternatives such as Gimp. This package is virtually identical to the more expensive industry standard paid for software, with the odd different function and editing technique.

You don’t know what other competitors are using so don’t make assumptions. This can be dangerous. At the very least you can trial the free alternative and then analyse the results at the end of one month’s usage. If you’re happy with the productivity and quality of the work the package is producing, you can stick with it and save possibly thousands of pounds.

Choose Suppliers Wisely

The big guns are not always the cheapest suppliers to opt for. With a larger client base, they will be more inclined to keep prices high and rely on their reputation rather than providing you with a cheap introductory rate to keep your business. Smaller companies will be more eager to secure your business, providing you with preferential deals and offers. To secure your business, they may offer a long-term contract at a reasonable rate. This is a tad risky as you may not be certain of their business footing, their ability to provide you with goods in a timely manner or their financial security. However, to save money, you may need to take a calculated risk.

By focusing on the smaller firms, you may find that they also specialise in niche products that could benefit your business. From large, expensive hardware to cheap printer cartridges, you can be sure of a more personalised service from a smaller and less well known national firm. You will be able to get through to someone on the phone, they’ll know you by name and you will quickly get to know the person or team handling your orders.

Hire Astutely

It can be difficult to secure the skills you need for your startup if you have minimal funds. You won’t be able to attract the most experienced candidates as you won’t be able to match their salary expectations. You need to seduce young fresh talent with offers of innovative work, a chance to have a massive input from the embryonic stages of a business and a happy and productive working environment. While many millennials are keen to achieve the maximum salary they can to reward their hard work, others are keen to achieve a sound work-life balance and want to work for a smaller, more niche firm in which to flex their muscles. You shouldn’t make empty promises of non-existent promotions or wage increases if they aren’t there as this will cause resentment. You need to be honest. If you can offer them responsibility from early on, and reward them financially as and when the revenue does increase, you could secure a capable and talented team without spending the big bucks.

Get Noticed On A Budget

Marketing is a key aspect of any startup launch. You may have the finest website from which to display your products and services, but if no one knows that it’s there, you will fall at the first hurdle. You need an online presence. There is no need to spend a fortune outsourcing to a market leading advertising or marketing agency to conduct an online campaign. By implementing a DIY marketing campaign and utilising your social media channels, you can quickly generate an online buzz and a following. Intuitive marketing techniques such as product launch countdowns, customer incentives and discounts are great ways to generate interest in your business and direct traffic to your website.

If you are an online based business and your website is the main platform you use to sell your products or services, it’s vital that you can direct as many visitors to it as possible. You need to make sure that your website is intuitive, easy to navigate, fast to load and displays your wares in an attractive way. Getting the footfall to your website is often the easy bit; converting this to sales is the hard part.

Go Second Hand

If you are working from an office based premises, you may need to furnish your work environment. Don’t head to the designer furniture outlets, and instead purchase some second-hand stock. By saving money this way, you can invest your cash down more pressing avenues in order to realise your business vision. You can still pick up some exceptionally well designed and ergonomic pieces of furniture such as desks, chairs and tables. You may even be able to secure a fleet of reconditioned laptops, tablets or smart TVs for meeting rooms. The days of the singular booths lined with desktops and separated by partitions are long gone. You want to create an environment that is light, bright and conducive to team working.

If you don’t need an entire floor within a building, you could hire part of an office. Often other startups will come together to share an office space and therefore the cost of the lease. This means you are not overpaying and wasting money on space you don’t need. You may also be able to make contacts and begin networking with your office neighbour, especially if they are in a similar field to you.

Accounting

Perhaps the most effective way to stay on top of your finances is to hire an exceptional and specialist accountant who works with startups. These professionals know the ins and outs of tax legislation and the procedures to follow when it comes to small businesses and limited companies. They can save you tax, talk you through a two-year financial plan and work alongside you to make your company as financially efficient as possible, ensuring your cash flow remains buoyant at all times.

While an accountant may seem like a large financial outlay, this is a sound investment that is well worth it. In the long run, they will repay their fee ten fold or more as you become a tax-efficient entity. Sound money management is vital if you are to survive your first eighteen months of trading. It’s not unheard of for small startups to be victims of their own success as they become more well known, interest is piqued, and orders start piling up. However, without the cash flow to back this up, many startups crumble. With a good accountant in your corner, you can mitigate the chances of this happening.

You should be congratulated for taking a leap of faith, breaking away from full-time employment and attempting to turn your entrepreneurial dreams into a reality. No longer do you have a steady wage, excellent promotion prospects and a secure financial future. While this sounds terrifying, you also have the opportunity to forge your own way in the business world, and this is exciting. You will be working for yourself, you won’t have to answer to anyone, and you can now have a go at being the employer rather than the employee. Follow this advice, and you could be the finest startup Scrooge, saving money and seeing your business go from strength to strength.