Launching a side hustle or startup can be a great way to boost your income. By generating a second source of revenue, you can improve your financial situation and achieve your money management goals. Of course, you’ll want to keep your costs low to reduce risk and maximize your profitability. To get started, take a look at these three ways to cut startup costs now:
1. Work from Home
Leasing office suites and commercial units is a substantial commitment and can easily run into hundreds or thousands of dollars a month. What’s more, many commercial leases run for months or years at a time, which means you’re making a long-term commitment that will have a significant impact on your running costs.
However, you may not need to lease workspace at all. As millions of people embrace homeworking, operating from your residence could be a viable way to launch your startup. With access to utilities, space and resources, you might be surprised at how easily your home can be transformed into a business hub.
Many entrepreneurs work alone, particularly in the early days of a startup or side hustle, but there are aspects of your business that you may need support with. If you want to create a functional website, you may need to work with a designer or developer, for example. Hiring in-house staff is a costly endeavor and, fortunately, it’s one you can avoid.
Working with third-party companies and freelancers gives you the flexibility to pay for the services you need, rather than financing monthly salaries. Instead of hiring a team of IT professionals, for example, you can access the round-the-clock support you need via managed IT services in Dallas. Outsourcing in this way can drastically reduce your business expenditure, while giving you access to a much wider range of skills. As the gig economy continues to grow, you’ll find it easy to access the expertise you need when you outsource.
3. Adjust Invoicing Policy
Large corporations often have 30-day payment terms, which means customers have a maximum of 30 days to pay your invoice, once it’s presented. As a small business, however, lengthy payment terms could affect your cash flow and, therefore, your continued operations. Implementing a 14-day payment window can prevent this from happening and ensure that your cash flow remains consistent.
In addition to creating an invoicing policy that works for you, be sure to have processes in place to chase up missed payments. Some small businesses have to turn to external funding such as loans when their cash flow is disrupted. With effective invoice management, however, you can avoid the costly fees and interest rates that come with business loans and retain a larger percentage of your turnover.
Budgeting for Business Costs
Every business has some form of costs, but keeping them as low as possible enables you to generate higher profits. Due to this, it’s important to create a comprehensive budget that will show exactly how much your startup costs to run. With this information, you can ensure you have an appropriate amount of funding in place and avoid unnecessary disruptions as you launch your startup.