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Expert Answers to Biz Questions
Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
How to Be Smart With Your Money in the First Year of Business
When you are first getting your business off of the ground, money can be pretty tight. Even if you got a small business loan from your local bank, you still should be pretty careful with your funds to be sure you don’t end up hopelessly in the red.
However, by watching your spending and being as frugal as you can, the first year of business can be a financially positive one. The following tips can help you to be as money savvy as you can and successfully make it through the first year of your start-up:
Common Mistakes to Avoid
Before we delve into the frugal tips, let’s briefly look at some of the common financial mistakes new entrepreneurs make. Going out to purchase brand-new furniture and equipment is a classic yet understandable goof. After all, you are excited about your new business and the initial public response is very positive, so you might think you can afford fancy new computers and designer furniture. The same is true for rent—you may want to be in a trendy part of town where lots of other start-ups are located. In general, while these are great goals to work for, when you are first getting off the ground, it is best not to spend beyond your means and end up with tons of debt on your credit card.
Run Your Business From Home
Rather than rent even a modest office building, consider launching your business from home. This will save you a ton of money as you get your business off the ground, and you can remind yourself that you can always rent office space in the future, once your company is up and running with a steady income. You can transform a spare bedroom into an office and/or work out of your garage or family room—whatever it takes to avoid paying rent.
Make Saving Money Part of the Company Culture
Call a start-up meeting and let your fledgling team know that you are trying to save money as much as possible in the beginning, and encourage them to look for ways to be frugal. Explain to your team that if they are out of paper, pens and computer ink, they should spend some time checking out the local sales at office supply stores prior to heading out to shop.
Look for promo codes and other deals whenever you are shopping for anything related to your business. For example, if you decide that you want to invest in an identity theft protection program look up promo codes for that service to ensure you are getting the best deal before you sign up for anything.
Consider Bartering for Services
Another great way to be frugal during the first year of business is to consider trading your services with other companies. For instance, you may be able to swap your products for help with marketing and public relations, or trade your services for assistance with accounting and invoicing.
Stay Frugal, Stay Successful
As your business grows and becomes more successful, you may be able to move into an office and/or treat yourself and your team to some new furniture. However, maintaining a frugal attitude as you move forward with your company is also wise. You should continue to be smart with your money and look for deals and ways to save money no matter if you are in the red or the black.
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