You’ve got a great idea for a business. You’ve done your preliminary research, and have decided to move forward. The problem is, you only have a small amount of capital. Should that hold you back or are there ways to succeed even on a shoestring budget? In this post, we’ll go through a list of ways technology can help you reduce your overall business expenses and save money when launching a startup.
How Tech Can Help You Reduce Your Costs Upfront
Blockchain for Startups
Blockchain could be extremely useful for a startup. This technology has several different applications and can help to reduce expenses significantly. Blockchain is especially helpful because it provides access to an existing infrastructure of computers. You can rely on the network to provide the computing power you need without having to make a significant investment of your own. If you’re a graphic designer, for example, you’ll need a computer with substantial computing power, and buying one yourself can be pricey.
With blockchain-based apps such as Golem, you can rent processing power from others within the network. This will cost less than buying and running a suitable configuration. In any case, you can use it until your business can afford to switch to its own system. Keep an eye on this sector, as there have been a lot of exciting developments over the last few years. If you’re still not sure how the tech operates, don’t feel alone. There are very few people with full working knowledge of it. Fortunately for startups, there are a lot of companies developing useful apps in this space.
Robots are Becoming More Advanced
The robotics industry has always attracted a lot of attention. Up until now, though, robots were limited in terms of what actions they were able to perform. Now, with artificial intelligence becoming increasingly more advanced, robotics has been given a big shot in the arm. It’s the industry that almost doubled between 2012 and 2017. That puts it in the top spot as far as growth is concerned. It also means that robotics applications are increasingly finding their way to smaller players such as startups. While the initial outlay will be fairly high, you’ll save through:
- Paying out less in terms of salaries and benefits
- Improved productivity
- The robots delivering the same performance over and over again. There’ll be no drop in productivity thanks to boredom, or a lack of training.
Artificial intelligence advancements have made this one of the most useful types of technology for those starting their own businesses. It can be used in a range of different applications and can assist your company by dealing with tedious tasks. This saves you money in a few ways, namely through:
- Improving productivity: Take, for example, a simple task of confirming incoming payments. It’s a boring task and one that can be handled in seconds by AI-based software. Your staff, therefore, get to spend time on more interesting and important tasks.
- Reducing human error: Humans make mistakes. It could be a simple one such as accidentally swapping numbers. The more prolonged and tedious the task, the more likely it is that errors can creep in. AI doesn’t get bored, and it’s highly accurate.
- Providing a useful resource for prospects and clients: AI can be used to create chatbots or apps that make customer interactions with the company easier. Chatbots can be employed to answer simple questions. This saves your employees from having to answer the same queries time after time and allows clients to get the answers that they need as quickly as possible.
- AI could also make your marketing go more smoothly: A good CRM program can assist in identifying potential leads, determining the stage of the buying cycle that they’re in, and helping you get content through to them to aid the decision-making process.
Additional Ways Businesses Can Bootstrap
As a startup, you’ll want to keep your costs as low as possible. Here are some tips to help you do that:
- Take advantage of the gig economy: Outsourcing some basic functions to freelancers gives you access to more talent in a more affordable manner. You can hire them on a project to project basis, and you don’t have to worry about providing benefits.
- Hire the right people for the job: Hiring an expert accountant may sound expensive, but working with them could also save you a lot of money come tax time. Additionally, it means you can rest assured that the work is being done correctly. Basically, in short-term his may be a more costly option, but it’s better for business growth in the long run.
- Look for alternative sources of financing: If you need additional startup capital, where you source it from is extremely important. Alternate funding sources such as unsecured business line of credit providers and microlenders are more willing to take a chance on a new business. These options may also net you a better interest rate on a business loan.
- Operate in an industry you understand: According to self-help literature, all you need is passion. In reality, you’re going to need to have a basic understanding of the industry you’re operating in. Running a business within a sphere you’re familiar with could prevent you from making serious errors that could cost you in the long-term.
- See if team members are willing to work for equity: Needless to say, employees need to be paid for their work. There may be cases, however, where the person is willing to work for free in exchange for a share in the business. This may be an option which would work to your advantage, especially in the beginning stages.
- Keep overhead costs to a minimum: That fancy office in the beautiful part of town might look great, but it’s also going to be expensive. Run the operation from your own premises for as long as you can instead of adding unnecessary expenses.
The Takeaway + A Few Startling Startup Statistics (Infographic)
All businesses can benefit from cutting costs. For a small startup that has very little working capital, it becomes a matter of survival. The tips above are meant to provide starting ideas on how to reduce your costs. Can you think of any more? In the meantime, take a look at the startup statistics infographic below. The infographic includes information that can help you make better decisions for your startup business.
She has spent the last decade assisting entrepreneurs with starting new businesses, obtaining startup and working capital and growing their customer base using various digital marketing strategies.
She enjoys writing about her experiences as an entrepreneur and using data and information from reliable sources to back up what she writes about. Through her writing she aims to educate other entrepreneurs on how to obtain capital and build successful businesses doing what they love.