If you are just starting your business, or even if you have been in business for a while now, one of your foremost thoughts is definitely how to reduce costs and how to get optimal value at the lowest costs possible.
Definition: Bootstrapping in business means starting a business without external help or capital. Such startups fund the development of their company through internal cash flow and are cautious with their expenses. “It may be slower, less sexy, and counterintuitive, but you can be better off growing your small business by bootstrapping rather than seeking outside capital.”
Bootstrapping forces you to be more realistic, to not waste time and to be better prepared for the long run.
At Audeo, we are definitely bootstapping and while it pinches us sometimes (read as almost everytime and insert hot tears here) it definitely keeps our focus in check and on the long term. It keeps us nimble and constantly redefining our corporate strategy, one eye on the present and the other on the future.
So here are some surefire ways to keep your costs low, getting your dream business off the ground without seeking outside investors.
Get Operational Quickly
One of the best things you can do to reduce risk is to begin selling immediately. Hopefully, you’ll generate revenue right from the very beginning. If you can find a product or service that will sell immediately to large numbers of customers, you can use those sales to finance your startup, using the receivables as collateral for a loan.
Reduce the use of paper, better still, Go Paperless
The world is evolving and digitisation is the word on the street. Email correspondences are official documents and read receipts are proof enough that someone has seen the document you have said. Also, with virtual storage solutions like Dropbox and the Cloud, is it really necessary for you to print all those documents and the Three Photocopies, just incase?
Use space more efficiently
Let’s say you have started an online fashion company, do you really need a duplex as your office space in the first year of your business? No? Exactly. In businesses where stock is physical and space is essential, you can use your boys quarters if you have one. If you are in a business where your staff do not need to come in everyday, you can make use of shared spaces, such has the one our awesome client, CraniumOne has set up.
However, if you already rented an office space and you are not optimising it, you can consider sub-letting to another small business. Let us know if this is the case and we can connect you to a business that needs to sub-let.
Pay bills early
Paying bills early is not only beneficial to your business, in that it gives you a reputation of integrity, many Service providers also offer discounts to early birds to encourage prompt payment. If that is not available initially, it can be made available over time, once a strong relationship is built. For example, we offer a 2.5% discount on upfront quarterly payments and a few of our clients are more than happy to enjoy this. Yay for cost savings.
Outsource. Outsource. Outsource
In order to save costs, it might be cheaper to outsource some functions in your business, like Accounting and Tax services, which Audeo does so amazingly well. Accounting at Audeo is an essential tool SMEs to record and track proper growth, help them to be accountable through our easy to use tax filing packages, while providing business optimization solutions that enable them to run with improved efficiency while increasing labour productivity and providing these services at a price point that is cheaper than having a full time accountant, yet delivering better results.
Ready to join the list of amazing businesses that are #LovedbyAudeo? Contact us here.
Other services you can outsource include; Logistics, Human Resources and Legal services.
Seek Quotes from at least Three Vendors for every purchase
Competitive Bids!!! Seek at least three bids on everything. Even mundane purchases merit shopping around. If you quote a competitor’s lower price, a supplier or vendor will often match that price to win your business.
What are your most handy bootstrapping techniques? We’d love to interact with you.
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