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Last Updated on December 10, 2017 by Work In My Pajamas
Starting a business is a proud moment in one’s life. However, it also entails a unique set of responsibilities including shouldering the initial expenses at least until you actually get the ball rolling with investors and paying customers. To shore up the money needed for a commercial venture, turning to a frugal lifestyle is necessary. Here’s six tips for budding entrepreneurs with limited capital:
Sacrifice the Daily Luxuries
Short-term luxuries, like cosmetic products, gym memberships, and Netflix subscriptions, can take up a huge chunk of the income that’s coming in every month. The cash you pay for these privileges could have been used to hire your first employee/s, design a prototype, or do production runs. That being said, it doesn’t mean you should sell your car and television set and live like a hobo until you break even on your business expenses. Simply identify non-essential recurring expenses and cut them off your budget. Besides, many of the things you pay for often have cheaper, sometimes even complementary, alternatives. For instance, instead of paying for gym membership, jog for 30 minutes every morning or evening.
Organize Your Finances
Starting a frugal lifestyle can be difficult if no baseline is established. Moreover, if your personal finances aren’t ironed out, this can affect your business’ cash flow. For instance, if you have recurring personal expenses, such as credit cards or mortgages, make sure it is separated from business-related expenses. Make sure to pay off personal debt first since they accrue in interest. Only after you’ve paid them off should you redirect money to your business. Work with creditors to make credit card and mortgage payments manageable.
Streamline Cash Management With Technology
Financial technology is changing a lot of things including how customers behave and how businesses operate, specifically how they manage cash flow. Managing your company’s revenue can be easy if you use financial consolidation software. The product helps businesses comply with regulatory standards including IFRS and local GAAP stipulations. Leaving your cash flow operations in the hands of state-of-the-art software allows for precise and efficient output. And while it costs money, the long-term advantages greatly outweigh the initial costs.
Do It Yourself
For business-related tasks that can be learnt on your own and don’t require any special licenses or permits, do the task yourself to save up money from having to hire someone else. A good example would be developing and designing a website for your business. It takes a basic understanding of HTML, CSS, JavaScript, and other similar technologies to develop a feature-rich fully-functional website, which would usually cost hundreds of dollars if delegated to a professional web developer.
Set Up Your Headquarters at Home
There is a long list of successful billion-dollar empires that started their humble beginnings in a garage, such as Amazon, Google, Harley Davidson, and HP. Skip the real estate, at least for now. Location is indeed important to a business’ image but the cost of a dedicated workspace or storefront can consume a huge chunk of your capital. This can be easily avoided by starting your company at home, whether it’s in the basement, garage, attic, or your room.
Learn to Cook
Not only is cooking an attractive skill to the opposite gender, it’s also a huge money saver. Cooking your own meals can save you almost $500 per month from eating out at restaurants and diners twice per day. Plan out your meals at least one week in advance. Buy the ingredients that you’ll need, cook the ingredients except for the meat and the other perishables, and store it in the fridge so you can reheat them quickly. In fact, try to automate all the other tasks that you do. Running a business requires complete focus and attention. You’d want to avoid investing any mental or physical effort on menial tasks, such as grooming and cooking.
Afterthoughts
Every successful entrepreneur has, at one point in their career, had to sacrifice luxuries and even basic necessities to make ends meet. Having said that, you don’t necessarily have to cut back on sleep or nutrition just to get your business off the ground. Use the six tips above to balance your lifestyle and business growth.
