The United States is the 3rd most startup-friendly nation in the world, behind Germany and Japan, according to US News, but startup entrepreneurs in America still need to keep operating costs under tight control in order to build their companies and make them profitable. Entrepreneurs who learn how to save money right from the start, are always ahead of the pack.
If you’re a startup entrepreneur, these tips will make it easier for you to trim operating costs and put your company in the black.
Negotiate with your suppliers.
You need suppliers, but suppliers also need your business. This is why you will have some leverage when it comes to negotiating contracts, so don’t be afraid to play hardball when you think it’s appropriate. When you’re connecting with suppliers, show your leadership skills by letting them know that you want discounts, and see what happens. Politely and professionally asking for better deals on cost per unit and other elements of supplier contracts, such as delivery costs, will help you to save some cash. Saving even five percent will make a big difference.
If you’re already locked into contracts with suppliers and vendors, renegotiate. In many cases, a supplier will cave in and offer better contract terms, rather than running the risk of losing your business over the long term. Better contracts with suppliers are a good way to trim costs in no time flat.
Shop around for cheaper insurance.
Startups need high-quality insurance policies from reputable providers. Buying the right insurance policies is important from the standpoint of protecting a startup from expenses, including damages from litigation, which might be costly enough to topple the business. Whether you need to buy workers comp insurance in Arizona, Florida or Virginia, you need to research carefully to find the best rates, bearing in mind that requirements vary from state to state.
The best way to do this is by using a quote service that compares insurance policy rates in your state. This type of service will aggregate data and help you to pay less for a good policy. Other common forms of insurance that startups often need include commercial vehicle insurance, business interruption insurance, liability insurance and property insurance.
Use outsourcing to save money.
Also, don’t forget about outsourcing. When you do outsourcing right, you’ll be able to pay freelancers to take care of business for you, without needing to offer them salaries and benefits. If you want to keep your startup team lean and mean, utilizing outsourcing for certain tasks, such as accounting, might be a very smart move. It’s possible to outsource so many tasks these days, from web design, to accounting, to marketing and SEO. Look at your team and decide which tasks they might not excel at. Then outsource those tasks to a professional who charges affordable rates.
Startup entrepreneurs need a diverse range of abilities, from vision and imagination to an eye for detail that helps them to track every single penny. When you put these tips into action, you’ll take control of your startup’s bottom line. Any money that you save may be used to move your vision for your startup forward.