Effective Ways to Reduce Startup Costs

business clock icon
Created November 30, 2020

Studies found that 24% of startups fail due to the lack of money, while 13% of them struggle to get financing. The truth is that most startups do not have an angel investor to financially support them. Bootstrapping and taking out a small business loan may help you launch a business, but they are not enough to run your startup smoothly.

Precisely because of that, it is vital to keep your costs to a minimum. Here are a few tips on reducing startup expenses.

Switch to Remote Work

Due to social distancing measures, many companies needed to shut doors and shift to remote work. Now, many organizations are starting to see the benefits of hiring a distributed team. Some of them even decided to let employees work from home permanently. 

Now, a remote work policy can help your startup reduce costs in many ways.

First, when working from the comfort of their homes, employees can better plan their workday and balance private and professional lives. Stats say that 77% of telecommuters report being more productive.

Second, remote work helps you save money on expenses associated with on-premise business operations, such as your office space, equipment, and travel reimbursement. A company can save $11,000 for each employee that works remotely half of their time.

Third, telecommuting improves employees’ morale, satisfaction, and loyalty. By boosting employee retention, you will also reduce the costs of targeting, hiring, onboarding, and training new staff members.

Reduce the Cost of Printing

Did you know that an average employee uses more than 10,000 sheets of paper every year? According to Gartner, businesses spend up to 3% of annual revenue on printing.

One of the easiest ways to reduce your startup’s costs is to go paperless. With the rise of cloud technologies, you can migrate almost any aspect of your business online, from document storage to digital invoicing, human resources, and inventory management.

To optimize your printing operations, consider investing in managed network solutions that will document workflow efficiencies for you and control the cost of printing. They have print tracking software that lets you monitor employees’ printing activities and view print documents.

Outsource Certain Aspects of your Job

As your business starts growing, the challenges will rise exponentially. Since expanding an in-house team is too expensive for most startups, you should consider outsourcing your business operations to outside vendors.

According to a survey conducted by Deloitte, 59% of businesses rely on outsourcing to minimize expenses. The same report found that 78% of companies are satisfied with their collaboration with third-party vendors.

Outsourcing helps you reduce costs in multiple ways, and including the following:

  • It is done by professionals with vast experience in a certain field. As such, it offers greater flexibility.
  • It helps you reduce the costs of employee training and recruitment.
  • You do not need to make infrastructural changes and invest in new equipment as your in-house team grows.
  • Outsourcing allows employees to shift their focus to other critical aspects of their jobs.
  • You get quality services at a lower cost compared to hiring an in-house team.

Examine Monthly Expenses

For starters, identify the types of business costs, such as direct, indirect, fixed, variable, etc. Only that way will you have a clear idea of the money coming in and going out of your company and make wiser budgeting decisions.

Next, start examining your monthly expenses to reduce unnecessary costs. Once you take the time and do a thorough inventory of your expenses, you would be shocked to find out how much money is spent on inessential business areas.

For example, when purchasing business software, it is easy to get overwhelmed. Reduce your costs by investing only in the tools your employees will really use. You could also save a lot of money just by switching to a more affordable supplier.

Take Advantage of Bartering

Companies of all shapes and sizes use bartering to optimize business expenses. It involves an exchange of your startup’s services for the services you need. The process does not include any cash changing hand. Since the outbreak of Coronavirus that has destabilized the global economy, this trend has been experiencing a tremendous upswing.

According to some recent statistics, 65% of Fortune 500 companies engage in barter. Moreover, this practice has helped many cash-strapped companies survive the COVID-19 pandemic. Bartering reduces operational costs, boosts cash flow, and lets you gain a competitive advantage.

Invest in Digital Marketing

Instead of paying for traditional business advertising materials, such as billboards, newspaper ads, or flyers, start investing in digital marketing. It can help your startup’s finances in multiple ways:

  • Digital marketing is highly personalized. Social media advertising provides advanced targeting options that let you display your content in front of the right audience groups. Email marketing tools allow you to segment newsletter recipients to provide more targeted feedback. That way, you will nurture your leads and boost sales faster.
  • Digital advertising works on a pay per click (PPC) principle, meaning you only pay when a user clicks on your ad.
  • Online marketing is simpler to track. With a wide range of digital analytic tools, you can monitor the performance of your marketing campaigns and stop wasting time and money on tactics that do not work.

Over to You

You can lower your startup’s costs without creating cheaper products or reducing staff. The tactics mentioned above offer more than that. They let you optimize your finances in the long run by making smarter, data-backed decisions.

About the Author:

Eve Anderson is a marketing specialist turned blogger. Interested in sports and exciting travel destinations. Love to share content that can inform people.


Submit a Comment

Your email address will not be published. Required fields are marked *

Is Your Business Being Found Online?

Laptop Metrics Colorado

Free Digital Marketing Report ($150 Value)

marketing module lineWant to know how your business stacks up against the competition?

Read more articles about Video Marketing.

Why Creating Video Content for Marketing Is a Great Profession

Do you want to boost your conversion rates? Are you looking for new ways to market your product or service? Do you want to rank higher on search engines? If you answer yes to any of those questions, then it's time you start adding videos to your marketing strategies....

6 Good Reasons That Will Compel You To Use Video For Your Marketing Strategy

For years people have speculated about the benefits of video content marketing. Is it worth spending so much money to create content? Are videos a good medium to showcase your product? The answer is yes, videos are a very versatile tool for digital marketing. They can...

Video Marketing With Vidnami: How Does It Work?

Video Marketing With Vidnami: How Does It Work? Created November 25, 2020 There's no doubt about it that video has become one of the most popular ways to market and grow your online business. If you've ever logged into YouTube to notice videos with hundreds of...

How Video Production is changing in 2021

How Video Production is changing in 2021 Created November 21, 2020 Ever since the COVID-19 pandemic began, humankind has been making numerous changes to their daily lives. These changes include small things like how they do their grocery shopping, how they interact...

Why Video Content Is Essential for Digital Marketing

Why Video Content Is Essential for Digital Marketing Created September 16, 2020 Businesses that want to stand out in today’s world have to have a very strong digital footprint. The number of businesses that target the same customers as you do is increasing by the day...

How to use video marketing in your social media campaigns

How to use Video Marketing in your Social Media Campaigns Created July 28, 2020 From the creation of Youtube over 11 years ago it's clear that video is a big part of being online and over the last few years many business owners are slowly incorporating video into...

Read more articles about marketing.

2021 Trend: Nano and Micro-Influencer Marketing for Higher ROI

2021 Trend: Nano and Micro-Influencer Marketing for Higher ROI

With COVID-19 continuing its course and minimizing all types of human contact (and the marketing opportunities that come with large gatherings), many struggles continue to weigh down on companies across the country. With struggles come cuts, and marketing departments...

How Can Video Brochures Compliment Your Digital Marketing Strategy

How Can Video Brochures Compliment Your Digital Marketing Strategy

In this modern-day and age, you need to be able to adapt to fast-paced marketing trends if you want your business to thrive. This means that apart from traditional marketing methods, you should also take the time to explore other marketing strategies, particularly...

Seven Powerful Ways To Market Your New And Existing Products

Seven Powerful Ways To Market Your New And Existing Products

Producing goods requires a lot of planning. From the conception stage down to factory production and product registration involve time and resources. But the big question is the marketing angle? How do you market your product, either existing or new? What type of...

6 Proven Methods That Can Perfectly Promote Your Business

6 Proven Methods That Can Perfectly Promote Your Business

There are several blog posts, books and courses on how to start a business in any field, but many of these do not cover basic hacks on how to promote your trade to make it reach people and convert them to potential customers. This needs to be addressed, so...

Local Marketing Tips and Tricks From the Pros

Local Marketing Tips and Tricks From the Pros

It is no surprise that marketing today is a core activity of every business. As more businesses find themselves surrounded by competitors, the challenge to grow their own business becomes bigger. The race to which one will survive and grow gets tenser. Marketing can...

How to Measure Your Marketing Effectiveness

How to Measure Your Marketing Effectiveness

Your marketing effectiveness is essentially how well your marketing strategies are doing. If they are doing well and making an impact, your marketing effectiveness will be high. If they appear to be doing nothing at all, then their effectiveness is low. In order to...

Share This