Running a startup on a limited budget is problematic. You need to cut costs and exist on minimal funds. That doesn’t mean you should make cuts everywhere, however. You must be able to make cuts in the right places, otherwise you could cause a lot of damage to your business.
These are just some of the startup costs you should never try to cut.
1. Your Product
Your product is your main offering. This is the ultimate factor that determines whether your company will succeed or whether it will fail. Put as much money as possible into your product because cutting corners will reduce the attractiveness of your offering.
That doesn’t mean you should make stupid spending decisions, but it does mean that your product, and the prototype, should get the absolute best money can buy. This could determine the fate of your business.
2. Product Testing
Now that you have a great product, you need to test it out. This is where so many companies fail. Testing your product before it goes to market could prevent a lot of embarrassing feedback later. It’s amazing how many startups have released products that simply don’t work.
Invest in product testing and leave yourself some funds to go back to the drawing board if things don’t work how you intended.
3. Your Website
These days you can’t succeed without digital skills. And your website should be at the forefront of your thinking when it comes to a new startup. It’s your best, low-cost platform.
Your website must be user-friendly and, above all, your website must be mobile friendly. With over half of all traffic originating from mobile devices a simple desktop website is no longer enough.
4. Your Social Media Presence
These days, social media is very much a pay-to-play platform. It’s no longer possible to simply rely on organic reach, unless you’re in the lucky few that happen to go viral. For everyone else, you must master social media advertising if you’re going to get noticed.
This means you should get started as early as possible with testing. Set some money aside to do this because it’s your best option for grabbing those first few customers.
5. Your Plan
Creating your product and marketing are crucial parts of your formula. But without a plan, you’re going to struggle to avoid wasted dollars and general confusion.
For example, let’s say a tech company has brought out its first app and it wants to target parents who need help budgeting. General social media advertising, not talking to your target market, and no timescale is only going to lead to disaster.
But if that same company has a plan things change. Their marketing efforts are targeted at parents. They know what this audience responds to, so they’re not throwing things at a wall and hoping they stick.
6. Bringing in Talented Professionals
Some startup owners think that they have lots of time and no money, so they need to use time because it’s their greatest resource. Taking on every task in-house might seem like the best option, but that’s not so if you want to get your startup off the ground.
Doing everything yourself is a long trial and error process. And creating that consistent brand isn’t going to happen anytime soon. But by outsourcing some of the more menial tasks, you give yourself more time to focus on the things that really matter.
Many companies started out like this, as Tony Messer, CEO of Wizz Hosting Ltd says, “We made sure to bring in accountants, designers, and marketing experts on a part-time basis when we first got started. It meant spending more money, but we started to make money faster than we would have done.”
Last Word – Even Bootstrapping Startups Never Cut Costs
The fact is that bootstrapping startups never cut costs where it matters because they know the result will be less progress, less ambition, and a poorer result in the long term. Don’t just think about the money you could save now. Think about the money you could gain in the future.
Where do you think is the best area to put money into, rather than taking it out?
By Annie Qureshi Entrepreneur