Launching a startup takes capital, and having a startup budget in place will help extend capital to keep your business running. After all, the second most common reason startups fail is lack of funding. The good news is that you can employ a few startup budget tips to ensure you keep ops running smoothly.
Yes, bootstrapping is a glorified way to strike out on your own as a new entrepreneur. However, if you want to catalyze business growth and success, you’ll need a bit of funding to make it happen. Once you have funding in place, don’t start spending like a seasoned startup founder. There will be unforeseen expenses down the road, so keep overhead low and spending to a minimum.
Your startup budget should be part of your business model, and scale as needed. Use the following tips to keep your startup funds looking good.
Startup Survival Tip #1: Think Before Spending and Track Every Dollar
Before spending a single dollar, be sure to think long and hard about how that dollar spent will benefit your business. If you can’t visualize a benefit, don’t spend it. One way to look at it is customer acquisition. Before dumping money into something, think about how many customers the spend will acquire. This will help you make crucial spending decisions.
Startup Survival Tip #2: Don’t Buy Anything, If You Can Avoid It
Going on a buying spree is a common mistake many startup founders make when it comes to funding. This is one of the reasons only about 10 percent of all startups make it, according to Neil Patel. Instead of buying a startup space, lease a space. The same goes for purchasing equipment needed for product development, or other operations tasks.
Rent as much as possible, because this can free up a lot of extra startup cash. For example, if you need to buy a piece of machinery for $5,000, but can rent it for $150 per month, you just freed up $4,100 for the next six months to spend on other important initiatives like marketing or sales lead generation.
Startup Survival Tip #3: Go The Used Route
If you do need to buy instead of renting or leasing, never buy new, at least until your startup begins churning a healthy profit. Interestingly, you can buy anything used or refurbished these days. From office furniture to tech, there are plenty of online marketplaces that specialize in selling trusted used or refurbished items.
For example, your starting a machinery startup, a growing U.S. industry worth billions, you may want to not start off on the wrong foot by purchasing new machinery equipment. This can be pretty spendy! Instead you can go the used route via online platforms like Machinery Network. Click here and do a bit of research before deciding on new equipment.
Startup Survival Tip #4: Use Innovative Technology
Software as a Service, SaaS, and cloud computing services are fantastic for startups. They can be leveraged for a low monthly cost, and keep costly developing to a minimum. After all, there is no reason to reinvent the wheel, especially when budget is tight.
For example, you can leverage a number of SaaS cloud computing platforms and enterprise tools for accounting, sales, email marketing, CRM, social media campaigns, remote team management, storage, and more. These platforms are also scalable, allowing you to build them out as your startup grows.
Startup Survival Tip #5: Never Let Accounting Take A Backseat
To keep the startup budget intact, it could be valuable to learn a few accounting basics. This not only allows you to cut spending on an accountant, but also allows you to get a clearer picture of your startup spending, revenue, and more.
Now you don’t need to be a full-blown accountant or CPA. You just need to learn the business basics. You can take a few accounting classes at the local community college, or even employ online training sites like Udemy to learn more. You can also use online platforms like QuickBooks for your startup.
In Conclusion . . .
Budgeting is important for any startup or new entrepreneurial venture. You want to ensure you have the funds to facilitate long-term growth and success. Don’t be a startup failure statistic; keep an eye on your startup budget by employing the above tips. After all, lack of funding is the second most common reason startups fail. By taking a proactive approach to your new business venture, you can be sure you are tracking spending, making smart decisions, and building a sustainable model for the future.