Before many entrepreneurs venture out on their own, they often receive paychecks from their “day-job” employer. That consistent infusion of money is both predictable and comforting. One challenge of starting your own business is when steady paychecks halt, and the next injection of funding is unknown. Suddenly, every dollar spent on startup costs must be considered and evaluated. As the former CFO and current president of Herbalife Nutrition, I am in constant contact with entrepreneurial independent distributors in 94 countries around the world where our products are sold. I know the challenges business owners face and can offer essential advice to help make every dollar count as entrepreneurs build and grow their dream — their own business.
Determine the Must-Haves vs. the Nice-to-Haves
When you build a business, startup costs can be overwhelming. With so many opportunities to spend money — often before you have any money coming in — it is essential to consider when to pay. Create a list of every item you need to invest in — from office and shipping supplies, to legal and insurance costs. Next, create a spreadsheet — either in Excel or Google Sheets — to monitor the spend and estimate the months you will make a purchase. The idea is not only to track costs but to stagger them — especially during your startup phase. Identify which items are essential and which are not, and where you can adjust purchase or payment dates to spread out your costs.
Utilize Resources
From the Chamber of Commerce and the Small Business Administration, to local non-profits, many organizations are available for advice and resources, and even executive mentorship. Startup lists and recommendations — from legal support to insurance providers — can help make the task of opening your business less daunting and save valuable time and dollars for other critical purchases.
Learn for Free
The minute you become a business owner, your customers will expect you to have in-depth knowledge about your area of expertise. While you may know a lot about your category, you may now need to up-level your insights or simply gain some basic business education. Subscriptions and research can be costly, but there are numerous free newsletters and sources of information available to help elevate your knowledge and skills and keep you ahead of the competition.
Think Before You Hire
While hiring staff may be critical from the start, some entrepreneurs can wait on expanding their teams and do more themselves when starting. Consider tapping into affordable labor through a local university job board or career fair. Many college students or recent grads will gladly consider a reduced wage in return for on-the-job experience and the opportunity to be mentored by an industry pro. Another option to reduce staffing costs is to use contract workers. These workers can provide immediate support without the costly overhead of a full-time employee.
Create Low-Cost Awareness
For many, advertising is a vital component of promoting your company to potential customers, but advertising can be expensive for most startups. Create your website using an affordable and effective online website builder. Share the news with local newspapers and on your social networks for cost-effective publicity, email contacts with information and coupons or promotions to engage customers and encourage action and promote your company on a neighborhood chat sites on apps.
Be Creatively Frugal
To save on overhead costs, consider working from home or sub-letting office space from other companies. Bartering is an excellent way to purchase without a capital outlay of funds. If you are a graphic artist, you can exchange work product — such as a logo creation — for legal or accounting support. Whether you lease an office or set up a home office, purchasing used furniture and refurbished technology is easy and affordable.
Starting on the entrepreneur path is exciting and liberating. You have the opportunity to set your hours, control your destiny, and follow a passion. By carefully weighing and prioritizing startup expenses, you can lessen the financial stress and allow more time to focus on building and growing your business.
