The internet has made it easier than ever for millennials to start their own businesses. Instead of looking for brick-and-mortar locations to rent, hiring staff, and spending thousands to fill the office, an entrepreneur simply has to have a website and an internet connection. Many people operate out of co-working spaces or even out of their homes with remote staff.
Here are a few ways to dramatically reduce your start-up costs to turn your business idea into a profitable reality.
Start With Contractors Instead Of Employees
Many companies can’t afford to keep many full-time employees on staff. They require a full salary, benefits, and health insurance, all of which significantly drive up employment costs. The actual expense of full-time employees has given rise to the gig economy, where contractors work with multiple companies instead of one employer.
Hiring contractors instead of employees can reduce your operating costs while giving you the flexibility to scale your business up or down. If you experience a bad month, your books will still balance as long as you scale back the work your contractors do. As long as you’re able to send them checks when they complete their work, your contractors will keep coming back to work for you.
Shop Around Before Buying
Make sure you shop around before you agree to buy anything for your business or sign on with a major supplier. You might be excited or in a hurry to get started, but that means you’re opening the door to get sold on something that’s not ideal for your business. Even if you think you’ve found a great deal, always shop around to compare prices and learn the market demand.
When you find a supplier that you’re comfortable with, try to avoid signing a long-term contract. You should be able to get out of an agreement after a month or 90 days at the most. This way, you’re not stuck with a vendor that doesn’t make you happy. Plus, you can take advantage of a better deal if one comes your way.
Be Wary Of Premature Scaling
Many business owners worry about turning away customers or clients because they don’t want to risk losing business. However, there comes a time when a company operates at full capacity and can’t take on other clients. It’s important for business owners to know when to walk away from a project they can’t complete well.
Failing to scale your business at the rate you want can lead to long-term problems for your company. You might hire additional staff that you can’t actually pay when a client leaves or a project ends. This increases your costs in the long run and forces you to scramble for more customers. Make sure you’re growing at your own pace and know what you can handle.
The first few years of your business are some of the most exciting times. You’re in for dramatic highs and lows as you continue to learn and hit major milestones. As long as you make smart financial decisions, you’ll be on your path to success.