Young Entrepreneur Council (YEC) is an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free virtual mentorship program that helps millions of entrepreneurs start and grow businesses.
1. Pay Yourself Last
Probably not what entrepreneurs want to hear, but holding your salary is one sure way to cut costs when starting out. Reinvest that revenue into products and human capital that make your business operate smarter, faster and better.
– Rakia Reynolds, Skai Blue Media
2. Outsource Non-Core Functions
Keeping your accounting straight, protecting your intellectual property, managing payroll for the first couple of engineers — it all needs to be addressed regularly, but it doesn’t make sense to hire full-time employees to handle these (and other) issues. Outsourcing any non-mission critical functions can save you money while keeping your ducks in a row so you can focus on what’s important.
– David Ehrenberg, Early Growth Financial Services
3. Go Standard
In the early years of a startup, go standard whenever and wherever you can. Building a website? Use a cookie cutter version off Squarespace; do not create one from scratch. Looking for an NDA? Copy and paste one from the internet do not have a lawyer recreate a special one just for you. Traveling for work? Stay with friends or friends of friends that will let you crash instead of a hotel.
4. Be Strategic About Office Space
Until you have Google revenues, you can’t have Google offices. For digital businesses, save money by strategically looking to rent office space in a great neighborhood near where your employees work instead of downtown. Better yet, see if you can make a remote-work model work for your business.
– John Rood, Next Step Test Preparation
5. Choose Your Technology Wisely
Be careful how and when you need to purchase new technology. Carefully consider whether each purchase is a must-have or a would-be-nice. Put the nice to have items on a rainy day list, and budget for the must-have technology. For example, if the latest, greatest technology automates some of your workflows, saving time and money, that might be a must-have item.
– Nicole Munoz, Start Ranking Now
6. Keep PR and Marketing In-House
In today’s digital age, a good deal of press and marketing is right at your fingertips through social media, blogging, etc. Although you may want to hire a fancy firm down the line, much of your marketing needs can be met with one or two capable and savvy hires. Finding a new grad who is hungry to get your name out and learn can be cheaper and more rewarding in the long-run.
7. Use “Second-Tier” SaaS Platforms
Skip the big name tools like SalesForce. It’s a great, but expensive, tool ideal for enterprise companies. There are at least two dozen CRM platforms at a quarter the cost that work just as well for a startup (and beyond). Don’t chase familiar names, but also don’t strictly rely on free tools that limit functionality and impact company efficiency. Important tools are worth paying for.
– Dan Golden, BFO (Be Found Online)
8. Skip the Benefits
You and anyone you hire will need to forego benefits in any form. There just won’t be the capital nor is it a good way to spend money. Those will have to wait for when the business launches and there is the cash flow to offer those. Most people that come on board to a startup realize that they will have to supply their own benefits. By keeping everyone as a freelancer, you can cut this corner.
– Andrew O’Connor, American Addiction Centers
9. Focus on What is Customer-Facing
You can usually manage to cut corners on almost everything that customers don’t see. For example, a flashy office space might be tempting, but it isn’t practical (or necessary) when you’re first starting out.
10. Find a Flexible Employee
Find someone who can lead, assist, organize, do customer service, market, etc. It is rare to find someone like that; but once you do, value him/her and let him/her learn more to be more productive and knowledgeable.
– Daisy Jing, Banish