In the high-stakes culture of many start-ups, expenditures can quickly spiral up and out of control. This is a serious problem for firms still in their early days, potentially crushing them before their time. Here are some ways to bring expenses under control.
Stick To a Budget
Image via Flickr by 401(K) 2013
Although it is difficult to anticipate all of the expenses that will come up during the course of the operations of your business, it is still important to make and stick to a budget, even if you have a small trove of start-up capital burning a hole in your pocket. You should try to budget out your money in such a way that you will have operating expenses covered for a substantial period, with a bit of money left over to use each month on unexpected costs. Once you have run through the monthly safety funds, avoid drawing on monies meant for other months in all but the most dire or opportune of circumstances, so as to avoid future crises.
Watch the Overhead
Keeping close track of your office overhead expenses may not be the most flashy way to keep your budget under control, but it is a vital and time-tested way to control costs. For instance, think hard about the amount of office space you are leasing versus how much you need. If you are not using large chunks of your space, and your lease is up for renewal anytime soon, you might look at other locations. Inside the space, expenses like electrical and gas bills can eat up cash quickly. Getting a programmable thermostat and disengaging your climate control when no one is around can cut the monthly outlay.
Barter for Services
Sometimes, in the early days of a company, you will find yourself needing some physical goods, services, or skills that your existing employment structure does not cover. You can spend money to plug in those gaps, but you can also offer your firm's services in exchange for something you need. For instance, if you are a website programmer looking for some graphic design for your logo, you can offer an artist some web design time in exchange for his or her work on your advertising images.
Freelance Versus Employees
As new opportunities come up, you will be tempted to expand your employee base to give your business the competencies you would require to exploit those opportunities. But, before you send out the notices looking for new employees, consider the possibility of bringing in freelancers. An experienced freelancer does not necessarily come cheap, and he or she needs thorough vetting before you bring them in on your sensitive projects. But, the fact that you don't need to train and develop the freelancer coupled with the ability to just not contract with them during slower times gives you crucial flexibility.
Keeping your head about you when you have money available is as important to running a successful firm as getting the capital in the first place. As long as you have a rational plan, however, you should be well set to find a future for your company.
