If you’re thinking of, or already have, set out to make your startup idea into a reality, you’re probably always considering cost. Although starting a startup has never been cheaper, knowing your cost structure and staying on top of your bills is (or at least should be) your number 1 priority. It’s shocking how much money is still being wasted by small businesses though.
I’m not going to go into the costs of well funded startups with big shiny offices and the fake “we’ve made it” feeling. I will instead share some of the tips I’ve used to save money whilst building a startup from Birmingham, here in the real world, where you need to make some money before you spend it.
I’m not going to tell you how to do everything on the cheap, I’m going to share with you how we’ve gotten the most value for our money.
So let’s get straight to it.
- 1 Here Are My 25 Simple Ways Your Startup Can Save Money:
- 1.1 Business Startup Grants
- 1.2 Apprenticeships
- 1.3 Co-working Programmes Or Places That Offer Free Hotdesking
- 1.4 SaaS products
- 1.5 Legal Costs
- 1.6 Get A Small Accountant
- 1.7 Partner With Other Startups To Get Group Discounts
- 1.8 Cheap Hosting
- 1.9 Use Cashback Sites
- 1.10 Barter
- 1.11 Look For Mentors
- 1.12 NEVER Save Money On Chairs
- 1.13 Use Transferwise
- 1.14 Use Free Apps & Websites
- 1.15 Accelerators
- 1.16 f6s deals
- 1.17 Stay Frugal (But Spend On Key Things)
- 1.18 Ask Suppliers For Better Deals In Exchange For Introductions
- 1.19 Never Make International Calls On Your Phone
- 1.20 Limit Your Number Of Subscriptions
- 1.21 Start-up Business Current Account
- 1.22 Use Chromebooks
- 1.23 Rent Out Your Extra Office Space
- 1.24 Don’t Waste Money On Recruiters
- 1.25 Outsourcing
- 1.26 Just make sure you have your BS radar on.
- 2 SEE MORE: The 7 Best Coffee Machines For Every Taste >>
Here Are My 25 Simple Ways Your Startup Can Save Money:
Business Startup Grants
When you think startup, you think raising money from either angel investors or VCs.
The bad news is that the UK startup scene is not the Silicon Valley one. Sometimes it looks as if in the US you can say things like: “we are a cross between Tinder and Snapchat but only for red wine drinkers” and hey presto you’ve raised $10m. The UK investors don’t seem to be as generous as their US counterparts.
The good news is that the UK has some of the best incentives in the world when it comes to startups. From EU funds to EIS and SEIS there are loads of options out there and your startup could potentially qualify to get some FREE money.
However, in my experience they are still difficult to access so don’t spend too long on them because most won’t be applicable to you. You can waste a whole lot of time (and consequently money) chasing these and it’s just not worth it. Prioritize which look like the best fit for your idea, and only take the time to fill out the paperwork for the ones that look like sure-fire deals.
Of course when you’re starting out you need the best people for the job. But if you ever need someone to do repetitive tasks that don’t need an expert’s touch, then consider hiring an apprentice.
You might think you’re better off outsourcing and in some cases you’re right, but not in the long run. The purpose of the apprenticeships is for young people to get skills (to be read: grow) and if you want your startup to grow you want to employ people that will grow with you. The Government is subsidising the wages you pay them so it’s a win-win for both of you.
Co-working Programmes Or Places That Offer Free Hotdesking
When you’re just starting out, the best cheap place to work from is home. But you’ll find yourself more productive in an environment outside of the house surrounded by like-minded people. There are a ton of places offering co-working space, hotdesking, startup incubators etc.
We’ve been in Birmingham’s e4f startup incubator for over a year now and having the first 6 months of free hot desking was great help but being part of the community helped us save a ton of money as well.
How, do you ask? Simple.
There are loads of people with different skills at the same stage of their journeys and we all help each other, share contacts, tips etc. One hour of chatting to the people in your building could push your idea forward quicker (and cheaper) than a few days of brainstorming and searching for contacts alone. And the best part is, you’ll be helping the people you’re talking to as well.
Chances are for most internal tools there’s an SaaS product out there already. Don’t spend time and money building one with your own developers. Just bite the bullet and pay for a subscription; it’ll be a lot cheaper to pay that than to make your own version, and the product will be a lot more robust.
Try and get a fixed price deal on your contracts rather than paying per hour. It can mount up to a lot of savings in the long-run.
Get A Small Accountant
To begin with a small accountant’s all you’ll need. You can scale up your accountancy firm as your own startup scales up, but don’t rush in thinking you need to be paying top money from the outset.
Partner With Other Startups To Get Group Discounts
If you’re getting a service you know other startups in your community need, then ask the service whether you could get a discount for referring more people to them. Better yet, ask if you can have a group discount so all of you will benefit.
If you have a network of other startup founders and you need to buy a new product or service, ask your network if they also need it. If they do and you approach the supplier as a group, you are more likely to get a discount.
Not all hosting is built equal. Try Rackspace, AWS Activate, Google Cloud Platform or even Microsoft BizSpark as they all offer free hosting for startups. We’ve tried a few different ones, and right now Rackspace is the best for our needs.
Use Cashback Sites
Ok maybe I’m biased here since we’re creating Britain’s best cashback site and all, but these can honestly save you a ton of money. Whenever you buy anything for you business (or for you personally), do it through a cashback site to get a little bit of money back.
This point goes for everything and everyone. If you work in a space with other startups, get to know everyone and trade favours. It’s important that you give before you ask (you don’t want to be “that guy”) and you can do this in a structured or unstructured way; short over lunch meetings or longer planned meetings.
Look For Mentors
Instead of hiring strategy consultants for high level stuff, which can be really costly, look for mentors to give you advice throughout your startup journey.
Successful people love helping startup founders, but don’t waste their time with simple questions which could’ve easily been Googled. Also, it might be counter-intuitive but the more complex the challenge, the more intrigued they will be.
NEVER Save Money On Chairs
I am a big believer in “put your money where your time is” and, when you’re building a startup, you spend a lot of time in your office. So make sure your work environment is as ergonomic and welcoming as possible.
Buy cheap, second-hand desks. Stand your computer monitor up on a stack of books rather than getting a proper stand. But NEVER save money on your chair – you’ll be spending a lot of time in it, so don’t compromise.
If you need to send money over seas then you’ll save a ton of money by using Transferwise (yes, this is a affiliate link and, yes you will get your first transfer for free) rather than the usual bank methods. There might be similar services out there but I’ve used them and never felt like looking for an alternative.
Use Free Apps & Websites
Whatever you need, there’s going to be something free out there that’ll get the job done. Need to keep track of group projects? Head on over to Trello; we use it to jot down content ideas, track website bugs and features and to make simple To-Do lists. When we want to talk as a team we use Slack. We record how productive we all are with RescueTime. Of course they all have premium features, but for the majority of them you’ll be fine with the free features while you’re just starting out.
Accelerators can be incredible; depending on your startup. You can get a bit of money for some equity, a productive work environment, access to mentors and sometimes even corporate clients. Just make sure they are right for you. Tim Cook will probably not be much use to you if your advertising budget is £10 a day. On the opposite side, you have mentors who’s only achievement after they got a job with a reputable company was not getting fired.
So just make sure you have your BS radar on.
f6s is a free network where founders get deals, list & recruit Startup jobs and apply for funding (Accelerators, Funds, Angels). We’ve managed to get some great deals by just keeping an eye on what new things are posted daily here.
Stay Frugal (But Spend On Key Things)
Cut costs wherever you can. Walk to work. Stop eating out. But keep spending on the things you really need. And if one of those things is nice coffee, then go for it.
You’ll be surprised what you find yourself relying on during your startup journey – and don’t let anyone tell you you’re wasting money by buying nice coffee, or getting a gym membership, and cutting costs elsewhere. You’ll know what’s best for you and what will keep you going.
Ask Suppliers For Better Deals In Exchange For Introductions
You’ll find that as your startup grows, your contacts list will grow too.
So if you’re asking for a service and you know the person would benefit from meeting one of your contacts, you could potentially ask for a discount to introduce them. Don’t abuse this though; your contact list will soon get tired of you and turn down future requests if you spam them with unrelated meetings. Make sure that both people will benefit from the introduction.
Never Make International Calls On Your Phone
There are so many free and easy ways to do this. Skype, Google Hangouts and VoIP mean you should never have to rack up a giant phonebill because you’ve had to make overseas calls on your phone.
Just remember if you use video calls… people can see you now.
Limit Your Number Of Subscriptions
It’s so easy to get carried away when you see subscriptions that “only cost $X a month” but before you know it that $25 a month here and $10 a month there can stack up to a lot of money. Only get the subscriptions you know you wouldn’t be able to live without.
Start-up Business Current Account
Some banks offer free banking for 12-18 months for startups. Make sure you do your research and get the best deal before you start.
Half of our team use chromebooks and so far they’re working brilliantly for us. So much so that we even wrote a blogpost about why we think they’re the best laptops under £500!
If you’re like us then you live in Google Apps. So for any tasks like research, marketing, social media, admin, “creating compelling content” (did you really think I wouldn’t use any keywords?) you work solely online. If that seems about right, then check whether it’d be more cost-effective for you and your team to be working on a powerful, cheap, internet machine.
Rent Out Your Extra Office Space
If you’ve got a large office, try renting out some of the extra space. It’ll be a nice bit of cash on the side to keep you going through these lean times and you might get some of the benefits of a co-working space.
Don’t Waste Money On Recruiters
Recruiters might be great for large companies but when you start out I believe it’s crucial to do the hiring yourself – all of the process, for a number of reasons. I won’t go into all of them here, but the most important one of course is cost.
Start by finding all the free job listing sites online that you can, write a compelling argument for why someone should fall head-over-heels for the chance to work with you, and post it. You should get responses firing in pretty quickly, although you’ll have to sort through them for the real gems that make you fall head-over-heels for the chance to work with them!
Outsourcing is a tip that I use with caution.
We’ve had good and bad experiences of outsourcing work, and honestly it depends on what you want and need. I’ve used quite a few outsourcing sites, from odesk to fiverr and in between, and with the exception of fiverr (where you only get very small jobs done for a fiver) you get what you pay for. If you get greedy and pay some random dude $20 for a job that would cost $200, you can almost always be sure that it will never work as expected and you will end up wasting a lot of your time either managing the process, or doing it yourself.
I now try to outsource most of the tasks that are time consuming, simple, repetitive and easy to verify.
And that’s it for this list. If you only take one tip away from this though, make it this:
Just make sure you have your BS radar on.
I hope you find some of these tips useful, and if you’ve got any of your own that you think I’ve missed or any questions let me know in the comments below, or over on Twitter.
Picture Credit: Tim Durr