Launching a startup or new business is no small feat, no matter what type of business you are running.
Nine out of 10 startups fail, and the top reason (38%) is because they ran out of cash or failed to raise new capital, according to
CBInsights.If something isn’t working in your current business model, you’ll need to quickly pivot, which may mean finding areas for cost-cutting and optimization. This doesn’t necessarily mean you need to do layoffs, start outsourcing, or make other big changes—small adjustments can be surprisingly effective at improving the situation.One area you’ll definitely want to look at is short-term and long-term business expenses. You’ll need to invest in solutions to improve your business. After all, they say you need to “spend money to make money.” But how can you know if you’re using your budget effectively?While you’ll want to get the best results without cutting corners, there may be areas where your resources could be better leveraged elsewhere. Here are eight business expenses startups and entrepreneurs often waste money on, along with some ideas on how you can reduce business startup costs for a more efficient use of funds.
- Measuring your marketing efforts: With access to accurate data and analytics, you’ll be able to see what’s working and what isn’t.
- Iteration and A/B testing: A/B testing, also known as split testing, is a marketing technique that involves testing multiple versions of a campaign against one another to see which one performs better. You should be continuously testing and optimizing your campaigns, making improvements according to the feedback you receive.
Avoiding vanity metrics: More social media followers doesn’t always equate to more sales. Decide which metrics are most important to you, then use this information to optimize your campaigns.
- Does the team know how to use all our tools?
- Do we need additional training to get the most out of our tools?
- Do we have multiple tools with the same functionalities?
- Multiple video conferencing software tools, project management tools, spend management software tools, etc.
- Multiple video conferencing software tools, project management tools,
- Do we have tools that aren’t being used at all?
- Are there tools we actually need that we don’t currently have the budget for?
- If so, how could we free up enough budget to get those?
Do our current tools offer
integrationswith other software providers to make our lives easier?
The client will gain a memorable and unique item while you benefit from their feedback, making this a win-win. Think of swag as a sustainable way to grow your business, rather than a one-time expense.
- Purchasing office space, real estate, office supplies, or inventory you can’t afford
- Developing new products or scaling customer acquisition before you’ve found product-market fit
- Over-hiring new full-time employees, or prioritizing quantity/speed over quality and business needs when hiring
In the long run, it pays to take the time to do thorough market research, find product-market fit, and develop effective hiring processes and well-defined job roles to build strong, lean teams. Over time, you can scale slowly as you see what’s working and what’s not.For more ideas on how to streamline your startup’s budget, check out our list of
money-saving ideas for small business owners.