Tips to Stretch Out Your Startup Capital
Once you have overcome the difficult steps of finding capital for your startup company, you will need to put that money to good use. Your main goal for most business capital should always be put toward growth, rather than frivolous expenses. However, even when primarily focused on growth, it can be easy to spend all the capital you have, before ever seeing a return on your investment. Before you shell out any money, you should learn a few ways to make the most of your money while retaining it.
Have a Plan
A strong financial plan will help you and your partners avoid spending money unnecessarily. This plan should lay out what you will be spending money on and different ways you will be making money for your business. You will need to adjust the plan accordingly as you develop it; lowering or raising costs and prices. As you develop your financial plan, make sure you leave space for emergencies that may dig into your startup capital.
Negotiating with vendors or companies your business gets services from will allow you to lock-in a great deal that can last permanently as your business progresses. As you spend more money to grow your business, negotiating prices with providers will allow you to lower your cost of expenses. Go into negotiations with clearly defined knowledge of what you can afford to pay for the service and with a mindset that a provider can only refuse your offers.
The key to stretching your money, in any situation, aside from increasing your income, is to cut back your spending. Do not spend your limited capital trying to make your company appear as if it has money constantly flowing in, instead use the money to improve your services and goods, so more money can flow in. Maybe use a coworking space like Sprout to limit expenses on office rentals and save money on travel by only sending one or two of your salespeople to conferences.
Invest in the Business
Continually investing in your business will allow it to grow accordingly. You should spend your startup capital improving your goods, services, and staff. Spending money on the proper employees will not only bring new ideas into the company, but increased expertise. You should aim to hire diverse employees that can work well together, so ideas can be generated and improved continually.
The beginner days of a startup company can be tough, and it sounds easy to stretch out money on paper. However, you will need to constantly make adjustments that suit your company best. Always take time to assess what your company needs and can do with the resources it has on hand.