What Can Startups Do To Save Money In 2020?

It can take years for a startup to find its feet and make itself financially stable. Having a good idea isn’t enough, you need to make sure it’s properly executed and intelligently funded. You can’t do that if you’re spending like a company that’s been around for years.

It’s imperative you save money on everything from marketing to operations in these early years. It’ll give you a fund to fall back on and establish a good practice of saving. Here’s how you can be frugal with your funding and impress your investors in 2020.

Office share

You might have an image in your head of your dream office. Exposed brick walls, professionally printed branding and a space for pizza Fridays. The truth is, it takes startups years to achieve this. Before you can run into the city center office of your dreams, you need to walk through some cramped rooms at the back of the building. It’s vital you find a way to save money on rent in these early years.

One way you can keep office costs down is by using office share options. There are thousands of other startups in the same position looking to cut the same costs from their monthly expenses. They’ll be more than happy to spend the first few months or years sharing a space with you. While your team is small and you don’t need much equipment it makes sense to work in more cramped conditions, at least temporarily. The office plants and decoration can come later, now is the time for substance over style.

Streamline admin

Admin can be a huge time sink for fledgling businesses, taking away opportunities to get stuck into the tasks that really make your business tick and the last of your remaining free time. Pointless admin tasks that could be done much more efficiently is only going to stall your growth, you need to find a way to streamline it.

Find tools and services that can automate elements of your admin. You may have to invest some extra cash, but its a necessary investment. In the first few weeks of your startup where you haven’t quite got your systems work out, you can end up throwing files into any old folder.

File management software like Proofhub’s helps to organize the documents you’ll need later and can establish a sense of order in your business early on. You also need to think outside the box for ways to reduce admin costs and hours. You can cut out unnecessary expenses receipts by using a fuel card from iCompario, which manages all your driving costs on one card and saves you another headache at the end of the month.

With these services though, look for free trial options to see which ones you like best. There’s no need to splash out on a yearly subscription for something you may not like in a month or so. Shop around a bit before you commit.

With these tools you can hold off on hiring someone to handle admin for a little longer and let the complicated stuff happen in the background.

Test your marketing

Marketing will take up a significant part of your initial budget, as you start to get your name out there and drum up interest in your products. However, misspend your marketing and advertising budget and you could fail to build any kind of substantial audience at all at a crucial time.

Your early marketing activity should be rigorously tested and planned to avoid any wasted spend. It’s hard to know how people are going to react to a new startup with a unique idea, so you need to establish a target audience and an expected reaction. Don’t just launch the campaign without testing, run similar, smaller campaigns with the same themes and messaging to see the reaction. From here you can tweak your campaigns and total spend into something more economically efficient.

Use marketing testing techniques such as customer personas to try and get a picture of your ideal customer before launching the campaign. This can help you target a more specific and hopefully profitable audience more likely to get invested in your startup.

Call, don’t meet

Lunch meetings are a nice break from work and a great way to help potential investors get a feel for you, but they’ll quickly rack up as an expense. There are much more economically efficient ways you can go about holding director meetings, chat with investors or introduce yourself to new clients. It’s understandable that you’ll want to impress, but there are cheaper ways of talking to something that will allow you to do public meetings more often in the future.

Instead of holding your meetings in person, do it over Skype or by telephone. Set up regular calls so you can cover topics more regularly and there isn’t the need to travel somewhere.

Let potential investors or clients get a feel for you over the phone before you meet them and realize something isn’t quite right. You’ll be able to get the same amount of work done, but you’ll save on travel to and from the meeting.

Telephones are cheap and services such as Skype and Google Hangouts are free high-quality video chat services. Just another expense you won’t have to file at the end of the month.

Some startups fail because the idea is simply bad. A lot of them though will fail because of poor budgeting and overambition early on. These are just a few ways you can save money in the early days that will set you up for a successful future.