Just because starting a business comes with unavoidable expenses, you still have options for driving down costs and making the funding you do have available go further. If you’re a newcomer to the whole entrepreneur thing, the following tips will help you manage your spending and avoid waste.

Buy used or rent equipment

New equipment can cost a bomb, which is why lots of startups instead choose to either invest in second hand equivalents, or even rent the gear they need in the short term, until revenues are rising and cash flow is more reliable.

No matter what type of machinery or hardware you need, you can find it on the used market. For example, these second-hand inspection equipment options are cost-effective, highly capable and can do just as much as their new equivalents, at a price point that won’t wipe out your budget.

Recruit people sparingly

Expanding your team too quickly is a bad idea from a financial perspective, since the more people you employ, the greater the bill for wages each month.

Instead you need to be savvy with your hiring policy and only recruit the minimum number of permanent members of staff that you need to gain momentum. You can always outsource work to freelancers in the interim, and then hire full time employees to fill roles when you are in a more stable position.

Don’t brush over insurance

While cutting costs in some areas makes sense, there are others where you’re better off spending money to buy peace of mind and long term security for your startup.

Business insurance is the best example of this, and even online-only organizations need it. Insurance lets you rest easy, knowing that if a calamity occurs, you can make a claim and avoid financial disaster.

Make every second count

There’s this widespread idea that entrepreneurs should be up all hours, dedicating themselves to getting their startup off the ground regardless of the cost to their personal lives and even their health.

This isn’t a helpful view, because in reality it leads more founders to a state of burnout that it does to helming profitable businesses.

It’s better to recognize that your time has value, and if you’re having to dedicate a large portion of your day to duties that are draining and not that fruitful, you’ve got the balance wrong. Spending money to solve issues like this, rather than being too miserly, will repay you in the end.

Harness free tools

It’s not often that you can get something for nothing, but there are lots of software solutions out there which you can harness free of charge, rather than having to pay outright or subscribe for a monthly fee.

Many of the best collaboration tools have free versions and you can also make use of an online free invoice generator from FreshBooks, for example. And even premium tools tend to offer free trials over a limited period, so you can take them for a test drive and see if they suit before making a monetary commitment to them.

Reduce energy costs

A lot of people don’t realize that when starting a business, one of the major costs is energy. Powering equipment and heating your premises while you and your team work is expensive, so it’s wise to be eco-friendly in your habits.

Switching to low energy lighting, and turning off equipment when it is not in use, such as overnight, is a good move in this context. It even applies to people who run their startups out of their own homes.

Wrapping up

Achieving cost-efficiency in a startup won’t happen in a day, and is a process that has to be reviewed and adjusted as your business grows. If you follow best practices early on, you’ll be well equipped for what comes in the future.