You did it! You finally started your own business. You dreamed of this moment all your life.
All the planning, experience, and hard work have led to this moment. That dream is now a reality, but how do you keep it alive? According to the Bureau of Labor Statistics, 20 percent of businesses fail in the first two years. That thought alone can cause you more existential dread than the year 2020.
In the early stages, saving as much money as possible is imperative to avoid that fate. We can’t help you with the existential dread part; try a good therapist for that, but we can definitely help you save money.
The following is a list of five things every startup can do to save money and avoid the dustbin of history. This list can help you do just that so you can focus your energy on doing what you do best.
#1 – Get Business Insurance
I know what you’re thinking: “I thought this list was about saving money, not spending it.” It is. Business insurance can literally be the difference between you taking a loss for a month and closing your doors. Accidents happen, and when they do, you will need insurance.
There are insurance policies for anything that could happen to your small business, even to protect you from random acts of God. Your whole state is on fire like California in fire season? Business insurance can save you.
Did you lose your store in one of the hurricanes that were so numerous that science ran out of names for them? File a claim. The point is business insurance will save you gobs of money and keep your business afloat in case of an emergency. Take your time, do your research, and find out which business insurance is best for you.
#2 – Use Free and Discounted Products and Services
There are so many discounted products and services out there for small business owners. If you have been invested in by a venture capital firm with a solid portfolio, the other businesses within that portfolio may give you discounts to help you succeed together.
Another place you can check is your bank directory. Larger banks will often give you a directory for discounts for using companies that also bank with them. Large tech companies like Amazon and Google have discounted services for startups as well. Early on every penny counts, so stack up those discounts.
#3 – Learn from Those with Experience
We’ve all heard the saying, “Don’t reinvent the wheel,” but what if you never knew the wheel existed? There are so many business solutions that are not common knowledge. This is where mentorship and your network can come in handy.
Sometimes just knowing people that have traveled the road you are currently on and learning from their experience could save you thousands of dollars. So take that success story out to lunch and pick their brain. Ask them about their early days as a startup. Ask them about what challenges they could have avoided if they had the knowledge back then that they do now.
These strategic relationships can be a major key to success early on, and their knowledge will save you money. Successful people are often giving out tidbits of information online as well check out this article to get that free information when you can. Those lessons that they learned the hard way could save you big money.
Don’t reinvent the wheel. Go get you four of them, put a frame around it, and drive — don’t walk to that destination. Then save yourself time, not money.
#4 – Keep All Your Receipts for Everything
There are so many tax write-offs for small businesses. Did you buy a new chair for your office? Keep the receipt. Did you get some sleek new registers for the store? Save the invoice. That employee you know you’re about to fire next week broke something, and you need to replace it?
Keep your proof of purchase. Pick up the check at that business lunch? Snap a photo of your receipt on the new phone you just got for business purposes and send it to your accountant along with the receipt and bill for the phone.
A good certified public accountant (CPA) can find a way to write off much more than you expected. Log every penny you spend (you should be doing this anyway) and let the government pay for what can be written off. It’s the law that they cover it (if it qualifies to be written off), but they won’t hunt you down to give it to you. Talk to your tax expert about what they can and can’t cover.
The government is giving you free money. Please take it. The big corporations all got big with the help of big government. There is no shame in it. Your dreams deserve that help. You deserve that help. Go get it and save money.
#5 – Have a Business Plan
“If you fail to plan, you are planning to fail,” said Benjamin Franklin.
For the love of all that’s pure in your business, please have a business plan. This seems like common knowledge, but so many businesses don’t have a business plan. Those businesses are much more likely to join that 20 percent that fail in the first two years. A business plan is a living document that guides your business to its short and long-term goals.
Think of it as Google Maps for your business. It should be constantly visited and revised as necessary. The revision part is like when you’re on Google Maps in traffic and an alternate and faster (in this case more profitable) route is available.
Select that alternate route as necessary and save a ton of money. If you don’t have a business plan or really any plan at all, you’ll waste precious time and money on a failed business idea.
These money-saving options can be a difference-maker for your business. If you have the most foolproof business idea ever and are a total rockstar, you’re still going to want to save as much money as possible. So do everything on this list, and focus your energy on doing what you do best.