So you’re trying to build up your small business, and thought you would consult Google. The results page is filled with so-called ‘cost-saving‘ business tips, but many are just not relevant to most. Tips like obtaining a business license, setting up an LLC, hiring an accountant, and spending $10,000 on what’s, well..just an idea at this point. Not to worry, many of these 8 cost-saving tips for building a small business can be applied with a couple hundred dollars, or no cost at all:
1. Leverage free knowledge online
Before doing anything, leverage the resources available on YouTube, podcasts on iTunes, Soundcloud, or your preferred streaming service. The bigger you grow, the less time you have to figure out how to do something specifically. For example, you could Google “how to photograph clothing on eBay”, and read dozens of articles.
The problem, is the sheer volume searches you will need to satisfy every question you will think of relating to your business. Absorbing content is my favorite method. For very specific content, maybe you need to read through blog posts to get specific answers . For me personally, I like to listen to several podcasts on the way to work, at meals, really any time I’m waiting around with nothing to do.
2. Set a timetable for achieving a proof of concept
Let’s say you’ve got the next big thing in the lawn care industry. A product add-on, a service, whatever it is, you think it’s golden. Part of building a small business is knowing when to stop pursuing something that the market rejects. I think back to a couple of t-shirt businesses I ran out of college that were complete failures. Had I stopped printing t-shirt designs that no one wanted, I would have had ALOT more money. For dates, and..well..something other than a stack of unsalable shirts.
The bottom line is that you need to be honest with yourself when something isn’t working. Multi-millionaire entrepreneur Gary Vaynerchuk is a big proponent of having a self-awareness mentality, which means being honest with yourself.
Think big, but start small. Maybe that involves giving away a product or two to strangers, or deciding to produce a limited run of products. Not all business ideas are successful – studies have shown that only about half of all small businesses will make it 5 years.
Part of saving money in the long wrong is not continuing to spend it on, well…ideas that the market isn’t that crazy for.
3. Don’t outsource
I know, it sounds counter intuitive to try to do everything yourself – which is true in the long run. But it’s important to use the skills you have that are valuable to begin with, instead of overspending. Ask yourself “If I had to hire someone to do [insert skillset you are great at], would it cost me a fortune to get going?“. For me, that was website creation. For you, it may be the ability to produce video content. Whatever skills that you have that are most valuable to others, structure your daily activities on those things, and figure out how to monetize those skills to get your business off the ground.
A good idea is to hire for your weaknesses. For me, that was accounting help. I’m pretty good at creating websites, but didn’t want to spend hours researching tax laws. While I’m far from an expert designer, I’m competent enough to tackle this startup cost without hired help.
4. Invest in a CPA (Certified Public Accountant)
If your business is making money, you need to be keeping track of cost of goods, inventory, expenses, mileage, and whatever else your type of business requires. As a sole proprietor, you may only need to consult with a CPA your first year in business. For other business types, like LLCs or S-Corporations, you will want to invest in a good CPA in the long run. This article details what most small businesses can expect to pay.
What most important is that you prove a concept, and know when it’s time to pay a CPA a couple hundred dollars for a short session. Many will even consult with you for free over the phone or even in-person. If you are reading this article over halfway through the year, go ahead and schedule an appointment for next year, so you know what you need to be keep track of in the new year.
What is most important, is that you are covered in the event of an audit. Leave it to the professionals to get it right. After all, the amount you may be saving in deductions could pay for accounting services entirely, even after the first year – and protect you in the event the dreaded IRS comes after your personal assets.
5. Choose an affordable business laptop or desktop
The lifeblood of online businesses (and many others) starts with a solid machine. Don’t think you have to go out and drop $1,200 to $3,000 on a shiny new MacBook Pro – there are plenty of options that will allow you to maximize your budget. If you only have about $300 for building your business, forking over several thousand dollars on hardware alone may not be the best option.
Consider buying pre-owned equipment from sellers with great reviews. Many of these third party sellers can be found on your local Craigslist, Facebook Marketplace, Amazon, NewEgg, BestBuy.com, and my personal favorite for electronics, eBay.
My personal recommendation as any of the ThinkPad laptops by Lenovo with great processors (2.5 GhZ or higher), at least 8 gigs of RAM, and a solid state drive for speed. With Windows 10 already installed with the Office suite, the performance dollar for dollar is vastly superior than anything you will find brand new at a big box retail store. I’ve picked up several for as low as about $300 on eBay. To check the current price, click here. You can also pick one up on Amazon for around the same price.
For a complete list of great small business laptops or desktops, check out PC Mag’s best buy list.
6. Have items laying around the house? Try the resale game
If you are planning an online e-commerce business, you know that marketplaces like Amazon FBA or eBay are two of the most popular ways to make money online. Even if you aren’t interested in managing an e-commerce store or marketplace, by simply listing items on Facebook, Craigslist, or apps like Mercari or Letgo, you may be able to turn that old clothing into 2-$300.
For anyone looking to minimize startup costs, finding items in-demand at local thrift stores like GoodWill and reselling them is one of the best ways to generate cash quickly. Even if you are not wild about selling on eBay, reselling is still one of our top tips for generating cash quickly to fuel a growing business – from yard sales to swap meets.
Also, if you do choose to get into the resale game, avoid buying boxes. You can actually order shipping supplies from sites like USPS.com, UPS.com, or FedEx.com. Lots of supplies are free for businesses, and will be shipped right to your door. USPS is probably the best for beginners.
7. Already have a full-time job? Leverage your connections
Billionaire tech entrepreneur Mark Cuban once said in an interview with Business Insider: “now that you have graduated, it’s your chance to get paid to learn. And what if you aren’t a recent college grad? The same logic applies. It is time to get paid to learn.”
If you find yourself working in retail, software, manufacturing, or any other business, take the time to explore what other people are doing around you. Chances are, someone you work with has a skillset that you can apply to your business. Whether you’re friends with an accountant, marketer, or engineer, simply being exposed to people that have different skills can save you thousands in the long run.
As an example, maybe ask if your office’s accountant will help walk you through how to keep track of inventory in exchange for a free lunch one day. Don’t waste these relationships – leverage them, and always offer your knowledge in return.
8. Build an online community – No cost to get started!
The cost of attention can cost thousands of dollars. From old-fashioned billboards, to Superbowl commercials, to Facebook and Instagram ads – getting the attention of your target market can get expense quick. As a small business, leveraging social networks like Instagram, Facebook, LinkedIn, and even Snapchat is critical to businesses that depend on repeat customers or a community.
For other business models, reviews may be more important than a loyal community of Instagram followers. Be sure to get listed as a business on sites like Yelp and Google.
Here’s a use case from the lawn care industry:
Every day, thousands of potential customers are scrolling through images using hashtags like #saturdayyardwork. Let’s say you are thinking about starting a lawn care business in Florida. There’s really no excuse as a small business owner not to take a picture of your crew, add some local hashtags like #OrlandoWeather or #CentralFL, and slowly start accumulating likes and comments. For every 4-5 posts you make, maybe drop an offer or coupon in the description. Don’t come across as the guy or gal that just wants something from a stranger ALL THE TIME. Provide something of value most often, and quietly drop in offers or specials from time to time. It takes consistency to see results, especially on social media.
We hope you’ve enjoyed these 8 tips to reduce costs when building a small business. If you recently received a raise, bonus, tax cut, or have a small amount of money to invest in your business, check out these 5 tips for stretching increased take-home pay to the max.