Nibletz Staff
If you are looking to start your own business, then it will be a natural desire to get going with things as soon as possible. You will want to get your business name out and about and establish yourself in your chosen industry. However, there are certain overhead costs that can mean paying a lot of money up front that your business might not necessarily have. Many small businesses make the mistake of doing certain things for their business, just because they believe that they have to. But in order for your business to grow, there are certain overheads that really just aren’t that necessary. There may come a time when they are, but to start with, they are spend that can be avoided.
So in order to keep within your startup budget and avoid unnecessary spending, this article is for you. It will go into some of the ways that you can save money as you start up your business and help you to cut some of your overhead costs. The more profit that you’re making, the more you can help your business to grow and get your business’s name out there. You can reinvest the money straight into the business, rather than paying out for various people’s wages or staff benefits, for example. Where to start, though? Here are just a few of the overhead costs that you don’t always need when you are first starting up a business.
Permanent Staff
When you hire a permanent team of staff, things can get pretty expensive. You become an employer, and with that, comes extra costs. Think about the benefits that employers should be expected to give. Some will help medical insurance costs or other similar benefits. Then there are legal obligations like sick pay or maternity leave. All of which you have to be looking at, as well as covering the costs of. Then there are things like a desk, office supplies, somewhere to park, and certain business expenses. It all adds up when it comes to hiring permanent employees. Some full-time will be needed, but you need to explore the option of hiring freelancers too. There are many benefits to it, even if they might on paper, cost more per hour than permanent staff would.
Freelancers are going to be experts in their field. If you need a graphic designer or an IT specialist, then a freelancer in that field will know exactly what they are talking about. The same goes for accountants or human resource specialists. You can hire them to do just the one job that you need them to do, and that is that. They will get the done quicker than a colleague would who has other obligations in the office. Then there is the benefit of them costing less overall. You quote a single price and are not responsible for their tax, insurance, or any other benefits. You don’t cover the cost of their laptop repairs or internet bills; they are all things that they will cover themselves. There is no set contract, so you don’t have to hire them again at any point.
The same goes for contracts with agencies. Before you jump in and set up a contract with an agency to run your social media or for the business public relations, you need to check if it would be cheaper to hire a freelancer to do it for you. In many cases, it might be. So figure out the sums and don’t get yourself tied into a contract if you don’t need to be. Make sure that you are getting value for money if you do decide to go down the agency route; be clear on what you expect them to do for you. In the early days, there are plenty of things that you can get done by hiring freelancers. Is this something that you would have considered before?
Office Space
This will really depend on what your business is and what space you need. But to start with, is an office a necessary cost? Rent of an office in a city can be pretty expensive, and you might not get much for your money either. So looking into other ways of doing things can be a good idea. First of all, will you be able to work from home or build an office space at home? You could convert an old barn or shed into a small office space for cheaper than buying a suitable building elsewhere. You could simply use a spare bedroom and have that as a dedicated space for your business. There can be a couple of issues that you might be thinking about with that, though. What about space for all of your documents or inventory? There are solutions that you could do for that, that will still cost less than getting an office of your own away from home. You could look into document storage or renting a storage space for any of the office supplies that you need. You don’t need to be overrun with filing cabinets or boxes of business related things in your home unless you really need to.
What happens if you have client meetings that you need to schedule? It won’t look very professional inviting them to sit around your dining table, right? Luckily, there are options here. Many offices that have space for meeting rooms will hire them out to businesses for meetings or conferences. It helps to pay their bills for the office space after all. So you can hire out rooms in existing offices, or even hire out a function or conference room at a hotel that caters for that kind of thing. In the grand scheme of things, and based on how often you actually have client meetings, it could end up being much cheaper than having to get an office space of your own.
If you think that you really do need an office space, then you could be one of those businesses that I’ve mentioned; rent out some floor space to other businesses or hire out your meeting rooms. At least then you can be making some money to cover some of the costs of your rent for the space. The key to starting up a business is to not spend more than you need to.
Company Car or Expenses
As soon as you start a company, you might make the mistake of going all out on various different things that you can spend on, just ‘because you can’. So think before you buy or spend. Can you use what you have already and just make a business expense claim against the business, meaning that it is tax deductible? Otherwise, things like a company car can get quite expensive. It be worth speaking to an accountant, someone that knows their stuff in terms of expenses and taxes. Again, as mentioned, hire a freelancer to pick their brains for an hour or so. Then you will know what they advise to keep your costs as low as possible.
The key thing when starting a business is looking at your outgoing versus incoming. You might get to the point where your business can only grow with permanent staff, for example. But until that point, follow these steps and you will be making greater profit margins to give your new business a boost. Have you ever considered any of these points before? Would be great to hear what you think and if you have had experience of doing any of these points.
