Starting up a business is exciting, inspiring - and expensive. At least at the beginning, you're unlikely to be able to get investment - so you will need to self-fund until you can prove to a lender or investor that your business is investment-worthy.
It's important to keep an eye on every penny during this phase, so that you don't find yourself running out of cash before you start to see a profit.
Here are five ways to stay in control of spending while your business is getting on its feet.
1. Make a business budget
Budgeting is the key to running a successful business. From the very beginning, it's important to understand your start-up costs (both one-off and ongoing), and predict likely sales levels.
If these don't match up, your cash flow will very quickly come to a standstill.
Remember that your budget shouldn't be set in stone, and should be regularly reviewed and amended in response to changes in your circumstances - for example, if sales are lower or higher than anticipated.
2. Find bargains online
Saving money means doing your research, and avoiding overspending on purchases. Whenever you need to buy equipment and materials, it's worth checking prices online before you head to the high street. Comparison sites can often find you good deals that you wouldn't find elsewhere.
This may also give you the chance to see whether discounts or special offers are available, or whether you can save money by clever buying. For example, office supplies will be cheaper if you buy in bulk.
Make the most of loyalty discounts or cash-back deals, and consider choosing less expensive brands if the impact of this will be slight.
eBay or Gumtree offer an easy way to pick up unwanted or no longer used office items from other businesses that are upgrading.
3. Avoid expensive debt
If you take on high-interest debt when starting up, you might end up pay hundreds or even thousands of pounds in interest - credit cards being a particular culprit.
The interest you pay on credit cards is considerably more than the interest you will earn on any savings, so make it a priority to pay off outstanding debts.
If you absolutely need a loan, car finance lender Elogbook Loan suggest finding a loan company that doesn't penalise you for paying your loan off early. The money saved on the interest through repayments can be substantial if you're able to do this.
Which? magazine also suggests moving your debts onto a single, zero-interest credit card. Do remember though that the zero interest rate will only be temporary, so you will need to pay off the outstanding balance before the promotional period expires.
4. Cancel unused direct debits
Direct debits for subscriptions and payments for other goods and services - which may have seemed like a good idea at the time - have a sneaky way of just rumbling on and on.
Those that are for relatively small amounts might easily slip under the radar and be barely noticed in your monthly outgoings - but they have the capacity to mount up.
A good example was given by a recent correspondent to Money Saving Expert, who explained that he had been paying a regular premium for repair insurance on goods that he hadn't owned for the past six years - resulting in an estimated total wasted expenditure of £1,200!
As part of your regular accounting checks, be sure to check that you have no direct debits set up for things you no longer have use for.
5. Curb your personal spending
No one wants to be a killjoy because of their quest to save money, but if you really believe your business idea has potential, you will need to make personal sacrifices.
Eating out on a regular basis may soon add up. Think about reducing the number of times you go out, and keep an eye on menu prices when placing your order. The same goes for your food shopping and visits to the takeaway.
Small savings every day, such as making your coffee at home rather than buying it out every day, can really add up over the course of a year.
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