Starting a new business venture is an exciting and often fulfilling time, so be sure to enjoy the experience as much as you can, but keep in mind the best ways to lessen the amount of cash you’ll be spending in the process. There are so many ways of doing this, but we’ll be walking you through our essential tips to get your business off to the best (cheapest) possible start.
It’s important to know that 99.9% of businesses are classed as SMEs, which means there have between 0-249 employees. Don’t think your business is too small-scale to achieve big, long-term goals, because almost all companies are in the same position when they start out, and even as they continue to grow.
The following is a series of tips and recommendations on how to save money while embarking on your new business venture. By following this guide, you’ll have your dream company in sight for a lot less than you had possibly previously planned.
The importance of planning
It’s important to have a clear plan for your business when beginning a new venture. Have clear goals and set yourself deadlines to have pieces of your planning done by. Not only will planning lay out clearly what you need to complete in order to achieve your business goals, it will also help to keep your finances stable. Include budgeting in your planning process and allow yourself plenty of time to complete objectives.
Nationwide views business plans as roadmaps that help to guide the business founder, keeping them on track. They write, “Whether you’re starting a small business or exploring ways to expand an existing one, a business plan is an important tool to help guide your decisions. Think of it as a roadmap to success, providing greater clarity on all aspects of your business, from marketing and finance to operations and product/service details”.
All successful businesses start with a plan, it doesn’t necessarily mean you have to stick to it completely over time, but it will help to guide you and keep you on the right road at the start of your business and beyond. Your plan can include all kinds of things, meaning it will likely be unique and completely different to others.
All business plans are different, but share a few key similarities throughout. Your plan may cover elements such as social media, venture capital, how much office space you’ll need, etc. This is how widespread they can be and why it’s such a good idea to create one. If your business required a bank loan, you would also most likely have to show your business plan to a representative of your chosen bank too.
Choose the right idea to pursue
It’s crucial to choose the right idea when setting up a business, this should be something you’re passionate about and ultimately something you believe can make money. Discovering what you want your business to be can actually be one of the most difficult tasks for start-up business owners.
Starting a new business should be a time filled with excitement, but it’s sure to bring its fair share of frustrations. Basing your start-up business around something that peaks your interests is key to getting through the tougher times and longer nights you’ll have to endure as a business owner.
The Guardian say that passion is absolutely a key element when pursuing a start-up business of your own. “Starting your own business is an amazing and rewarding experience – it’s also the beginning of a journey that’s likely to have its share of frustrations, dead ends and late nights. If you’re going to make your business the success it deserves to be, you need to have the drive and self-belief to weather any storms. And sometimes the difference between business failure and success is simply the passion to see it through”.
Create a virtual office
The Balance SMB shares our next tip by stating that the best option for many new businesses owners, is to create an office space that doesn’t come with the costs of an actual physical office. They believe you should create your own online connection with employees, customers, and the like, in order to save on cash.
Here’s what they have to say on the matter, “Technology allows you to to not be tethered to one location if your business allows for it. Start your business from your home and use technology to connect to your employees, target audience and customers. Once you have established your customer base and can spare the cash, you can move your business to an office or commercial building”.
In the modern world this is certainly an option, so don’t be afraid of it backfiring and putting people off of your business. Customers in particular have come to expect an online experience now, and will likely find it both welcoming and familiar.
Make the correct banking choices
Choosing the right method of business banking is essential when building your new company from the ground up. Not only can this be used as a great method of funding organisation for your business, but it can also act as something that helps to cut costs in ways you may not normally think of.
The Next Scoop agree with this tip by saying, “Switching to online banking is a great way to save money as a small business. When you open a bank account online, you avoid a number of the fees that come with opening a bank account at the branch itself. Plus, it also keeps the time you spend organising the business’ banking at a minimum. Without the need to travel to and from the bank, time can be better spent elsewhere”.
Opting to use a challenger bank for your business is also a great way to save money, and a convenient way for a new business to handle its finances. The main three challenger banking companies in the UK offer different perks to business owners that can be well worth looking into when creating a new venture.
With information sourced from Start Ups, we have compiled what each of the three UK-based challenger banks can offer businesses.
- Multi-currency cards – cut travel expenses and avoid foreign exchange mark-ups
- Fast Payments – transfer money to any other Revolut account for free, and save when you make payments to businesses around the world
- Payment approval – any of your team can raise payments that need your approval, while bulk payments allow you to make up to 1,000 payments with a single click
- Partner discounts – Revolut offers exclusive discounts and perks from partners to help get your business up and running
Starling Bank –
- Notifications – the app sends you notifications every time money enters or leaves your account
- Categorised transactions – these give you a valuable insight into where your business is spending most
- Goals – a unique feature that allows you to create financial savings goals. Then set money aside towards them
- Customisable budgets and rules – you can control exactly how company funds are spent, and even set specific rules for different users depending on how much freedom they should have
- Track spending – check balances and receive notifications for transactions, refunds, or payments blocked by your rules
- Soldo Mastercard – once you have an account, you can create as many prepaid cards as you need in GBP, EUR, or USD
- Reporting and analysis – get full visibility over your business, with the ability to generate tailored reports and export the data
Starting a business venture during lockdown
If you were on the brink of beginning a business venture before the lockdown period and have since had to bring your plans to a halt because of it, there may just be a few ways you can still make it work out and kick-start your new business. The silver lining to lockdown is that it’s forced many of us to stay indoors, which gives us more time to be productive from home, planning ideas to push our businesses forward, or to even begin a new company.
With this in mind, have you thought of how you may be able to take advantage of the lockdown period, that has unfortunately been caused because of the current coronavirus pandemic? Well, now may well be the ideal time to do so. You may have to make changes to your business plan in accordance to how you’ll now try to target your audience, this all depends on what sort of business you’re wanting to start up, however.
If you were thinking about opening a retail shop, why not make it an online store instead. This way you’ll also likely save a lot of money as you won’t be paying rent to a landlord on a monthly basis, you’ll be bale to operate from the comfort of your own home and can instead spend funds on making sure you have a professional, accessible website for customers to browse your products on.
The issues you may run into with an approach like that do exist however. Will you be able to bring in as many customers solely online as a new business, or will you be able to gauge how much stock you’ll be in need of at first? Possibly not, is the short and simple answer.
Advantages to starting out online
There are many advantages that come with setting up a business online, choosing to opt for this approach rather than having a physical shop in a town or city centre. It’s also the modern way of doing things, so you wont have to worry about consumers not trusting you or not taking you seriously just because you lack a physical presence.
The advantages to having an online business include, but are not limited to:
- You can build a global audience that can access your business 24/7
- It is cost effective for when you first start out
- You can manage your business from anywhere, at any time
- You’ll easily be able to research your competitors
There are so many reasons to choose to have an online business these days too, so if the coronavirus has forced your hand and you now have to take your start-up idea online, don’t worry about it. There’s much fortune to be found in the online realms of running a business.
Marketing, but only the kind you need to succeed
There is little use in blowing a big portion of your budget on a fancy marketing campaign early on in your business’ lifespan. Instead of creating a huge social media campaign for the first push of your new business, opt for more traditional methods, such as word of mouth and getting your family and friends to help out with spreading the word.
All of these things can save your new business money, but only choose to follow the sections that apply to your individual situation. It is important to understand that there can never be a universal set of rules for saving money, so try to incorporate only the things that apply to you. Spend time planning before you begin your business and refer to this guide if you ever find yourself in a place you’d rather not be in terms of funding.