Tag: Business advice

How To Save Money As A Start-Up

As a start-up business, you’ll face many challenges in the early stages of operations while you familiarise yourself with your business landscape and explore your new business venture. With so many different areas of business to focus on, budget can often be neglected. One of the most important things to consider though when growing your start-up is how to save money and reduce costs.

If you’re driven to save money early in your business, you’ll learn how to hustle and fight for the best resources as your business grows. Your investors will be impressed by your rigour and discipline and you’ll create a business culture that will fuel your growth moving forward.

We’ve compiled a list of questions that you need to be asking yourself if you want to build an efficient and profitable business that will not only keep current investors satisfied but also improve your chances of getting subsequent rounds of funding.

Do you need to use expensive software right now?

When you’re looking to save on initial purchases, known as the initial outlay, open source can help you get off the ground. You don’t need to buy that expensive office software and servers when you can switch to a cloud vendor at a fraction of the cost.

For most things you need to run your business – bookkeeping and accounting, word processing, design, or presentations – you can find an open source and/or cloud version of it that is free or much less expensive than similar commercial software.

Is there a tech solution?

Along similar lines to the open software, look for tech solutions to different business problems. Chances are that another start-up out there has a product that’s cheaper and better than the big brands on the market.

Do you have to buy new?

Buying new equipment can be a huge initial expense and paying for it over time may also put a strain on your future profits. So, where kit really doesn’t have to be new, buy functional but used.

Do you need it in the first place?

Do you really need that piece of equipment? Or do you need to replace or upgrade it? Think it through instead of just going for something larger or newer. Use what you have until you are certain you need something else.

Have you reviewed your operating expenses?

If you buy stationery for the office, is there a different supplier that will give your business a bulk or loyal customer discount? Day to day expenditures on simple things—coffee, maintenance, and supplies – all add up. Putting aside some time to go through your existing operating expenses to see where you could make savings could make a significant impact as your business progresses.

Get into the habit of comparing vendors and getting quotes at least once a year to make sure you’re getting the best rates. This includes your merchant card services – the more you grow and the more money you process, the more clout you’ll have to negotiate a more favourable contract.

Are you asking for discounts?

This is so simple, yet often very effective – and there’s no shame in trying to secure the best price for goods or services. If you don’t ask, you don’t get.

Whatever you’re purchasing, whether it’s software, furniture, or office space, always ask, “Is this the best price you can do?”. Ask if they have a promotional offer or rate and what that might entail. It won’t always work, but when it does, you’ll save.

Are you looking for discounts?

It’s usually cheaper to buy in bulk than individually. When you talk to your suppliers, see if they offer discounts for bulk buys. Generally, suppliers are willing to work with and negotiate terms with their customers. If your supplier isn’t willing to offer discounts, find one that does.

Don’t limit yourself to local suppliers. Yes, it’s good for the local economy if you do, but you may be able to find suppliers further afield that offer discounts on shipping and bulk purchase that cost less than local options.

Ready to barter?  

Bartering, especially with other businesses, might seem old-school but can still definitely be an effective way to reduce costs. You may have to wait until you have assets you can barter with, but before long you’ll be ready to swap services or unused equipment with a similar business in the area that needs it.

It’s important to approach these types of arrangements in a spirit of generosity. Make sure you know the value of what you have to offer, as well as what you’re asking from the other business to avoid insulting or embarrassing anyone.

Can you reduce your discretionary expenses?

Discretionary expenses are those you don’t necessarily have to pay at a particular moment. You may not even need the expenses at all. Work through your expenses list and determine the expenses you can reduce or remove altogether.

Can you outsource or contract some work?

For those moments when you have smaller tasks that don’t warrant a new hire but that you just can’t add to your packed task list, outsource or ‘micro-contract’. Use sites like Upwork to source support for those tasks that you just need to delegate.

It might also make for sense for your business to use independent contractors instead of regular full-time employees. This will give you much more flexibility in your hiring practices and save you serious cash on employment taxes and other costs associated with full-time workers.

Would you consider employing someone early in their career?

People at the start of their careers have little work experience but are looking for entry-level positions and salaries – and this can save you money. Yes, there may be times when a more experienced candidate makes business sense, but you’ll find that solid employees with little work experience are competent and eager to do well.

If you go down this route, good training is key. If you do bring in employees with less experience, set them up for success by training them well and addressing gaps in their knowledge and experience as you move forward.

Could you cut your employee hours?

Are there employees at your company who would transition to part-time if given the opportunity?

If you make it known that you’re open to shorter work weeks for those who might want or need them, this can save you from paying those full-time wages without having to lose a good team member completely.

Do you know the value of your best employees?

A high performing employee that enhances your company culture is a real asset. Not only that, it’s also a valuable relationship and support as you continue your journey.

The costs associated with hiring new staff can be significant, so if you have a solid team member, do what you can to keep them. Look after them, listen to them, understand what they’re looking for in terms of career trajectory and opportunities for growth. It’ll save you a lot of money and energy the long run.

Can you cut down on meetings?

The next time you’re in a meeting, do some rough calculations based on the number of people in the room, and the average hourly salary you’re paying them. Sometimes the results can be staggering.

Review both your own and your employee’s calendars—how many hours per week are spent in meetings? Evaluate the cost and benefits to the company. Most probably, you can cut back on meetings and free up time for getting actual work done.

Could you virtualise your office?

The current pandemic has forced companies to go virtual, but moving forward, do you need to be tethered to one location if your business allows for it? Start your business from your home and use technology to connect to your employees, target audience and customers. Once you have established your customer base and can spare the cash, you can move your business to an office if you need to.

Have you considered sharing an office or using a co-working option?

If you do absolutely need have a physical office for your business, why not share the costs on leasing a space with another business? This carries inherent risks, of course, but could be a viable option if you have a close business connection, especially if you don’t need lots of space.

Another way to approach this, if your team is small, is to look for co-working spaces in your area.

Could you do your own marketing and PR?

Hiring a marketing or PR agency can be very costly, but if you’re passionate and knowledgeable you could be your own spokesperson. So, learn everything you can about marketing and public relations for your industry, and make sure you’re putting your best foot forward when you promote and talk about your business.

It’s also a good idea to be as creative as you can with your PR – think outside the box, take a guerrilla approach, and cut through the noise. And if that doesn’t work, just ask. Call up media channels and simply ask them if they’d be interested in featuring your business. It’s often the case that journalists and producers are actively looking for a story – and you’ve just made their life a lot easier. Be subtle yet persistent and you’ll get that valuable media coverage.

Have you considered social media to promote your business?

Promoting your business through social media is much more affordable than investing in traditional media and print. Best of all, it provides two-way engagement between you and your market on a round-the-clock basis.

However, tackling social media on your own may help you to save money to start out with, but to do it effectively, especially over several platforms, you must devote a serious time and energy to it. So, eventually you’re going to need some assistance.

Have you tested your paid marketing?

This is a simple tip but one that will save you money in the long run. Too often, after you get a little funding, the urge to pour it into a Google or Facebook ad campaign can distract you from testing your marketing first. So, run a few small campaigns and ensure that your targeting and keywords look solid before increasing the spend.

Are you growing incrementally?

Incremental increases in your business growth give you an opportunity to measure the effectiveness of each step of the change before investing more money in the following steps. Smaller steps will also limit the losses should a change not go as planned.

So, start your business small and establish slowly increasing goals to grow your customer base. Once you’ve established your business and are operating well, you may find that you are able to spend a little more. This may be the time for you to address equipment upgrades or new hires. You may also want to explore changes like new products or services or expansion.

Are you tracking your cash flow?

Track your cash flow to avoid late payment fees or missing bill payments. Cash flow is critical and most small businesses that fail do so because they run out of cash.

Cash pays your expenses before you generate revenues. It also covers unforeseen expenses that crop up. Follow your cash through your statement of cash flows and use this statement both monthly and annually. All you need is your monthly financial data to determine where your business’ cash is and if you have enough.

Have you established a budget and sales forecast?

To really understand where you can reduce costs, establish an expense budget, then create a sales forecast.

Don’t stop there though. Make time each month to compare your actual spending and sales to your forecasts. This regular financial review will give you a better insight into where your cash is going, and where there are opportunities to increase your income.

Are you prepared for the unexpected?

Do you have a solid business insurance plan that is appropriate to your industry and all the related risks? If you invest in a bad policy you end up incurring heavy costs if something disastrous happens, such as theft, fire, or flood damage. Do the right thing and contact your local insurance agency to find out how to protect your business from potential risk.

Can you stick to your mission?

If you have a clear mission – and you stick to it – you’ll be better placed to keep a lean and savvy company structure and operation. Try to stay as focused as you can on your critical activities and assess every task that deviates from your ‘core’ in terms of whether it generates revenue or prevents losses.

Can you say ‘no’?

One of the hardest lessons to learn in a start-up is saying ‘no’ to tempting possibilities that are not in your short and mid-term scenarios and that will demand a lot of time and resources from you and your team. This is especially the case when the invitations come from business partners, but stay firm!

As a start-up, you cannot afford to spend money unnecessarily. These tips are small changes that reduce costs and go a long way toward saving money and improving profit.

 

 

Special thanks to Greenborough Management who created this blog for the Northern Max Accelerator, delivered for AD:VENTURE and Bradford Council.

Managing the challenges of working from home!

Kate Betts runs Capital B Media, a PR and communications agency which is usually based in an office. Here she looks at the challenges of working from home.

 

A lot of us are finding ourselves suddenly flung out into this strange world of home-working. And it is a completely different world.

I have been running a business for over 15 years, but this is all new for me. It will be new for you; it is new for everyone.

It doesn’t matter where your business is on its journey; established or start up, we are all learning as we go along and helping each other along the way.

 

If you are normally in an office with others, before too long you will find yourself at home and it will be different.

In the office we have co-workers to discuss what we are watching on Netflix, now we have the cat, and possibly the partner and kids too, for company.

Where we might have had a cupboard full of stationery and a printer that worked, we now find ourselves scribbling notes on the back of a random scrap of paper.

And realising that your internet connection at home is about as fast as the proverbial yoghurt pot and piece of string is enough to test the patience of anyone.

There are upsides. You don’t have to commute (thus saving money) and you can sit there in a scruffy T-shirt and jeans. Please no pyjamas; especially in these days of video conferencing!

I work in an office now where there are five of us. But in the past I worked from home and at remote offices for years, both while working as a ‘district’ reporter for radio and newspapers, and in the early days of Capital B Media. My colleagues on the other hand are fairly new to this game and already we have had some teething problems.

So, a few pointers:

  • If possible, do a dry-run. It might be that you have been forced already to work from home, or you are planning it within the next few days. If you haven’t already embarked on the adventure, then what about a practice first?

Everyone can work from home to try it out. Then you go back to the office for a day (if you can) and collect all the little things you forgot. So far our list at Capital B Media includes: highlighter pens, paper for the printer, the office mobile, the office calculator, the spare printer, numerous documents and an ethernet cable. It is amazing what you take for granted!

  • Keep the routine as much as you can. We are trying to keep some semblance of normality by continuing to work 9 to 5 and having a catch-up online every morning to discuss what tasks we are working on.

 

  • Remember your internet at home might not be as good as that in the office. So, don’t expect to be downloading, and particularly uploading, big files at any speed. If you do need to work with large files, can you compress them? Video in particular is a bit of a nightmare.

 

If you have an IT support company talk to them about what the system’s limits are – and then factor in that there are several dozen people trying to get on to your server and several million people also working from home. So, patience is a virtue, as is an ethernet cable – at least being wired is quicker than Wi-Fi.

 

  • Think about where you are going to sit. Most of us don’t have the luxury of an office at home, so we end up perched at the kitchen table. But how is that for your back? And are you constantly interrupted by the rest of the family? Or are you stuck in a room with limited natural light? Try out different locations – and chairs.

 

  • Give yourself a break. It is easy to feel guilty about the 20-minute walk with the dog or watching the lunchtime news while eating scrambled egg. But remember you take formal, and informal, breaks in the office too. How many mornings does it actually take a good quarter of an hour for people to start work because of an office conversation about football/ the latest film/ their journey? And then part way through the morning you all get lost in a conversation about some random TV programme and then you spend ten minutes in the afternoon looking at cat videos…. It is ok to take breaks in the office and at home.

 

  • Keep in touch. It is a lonely world, especially if you don’t have anyone else in your home. (And if you do, it might be worth reminding them you are working.) Regular contact with your colleagues can keep up the team spirit. Set up a WhatsApp group, chat on Microsoft Teams, email random thoughts. We are all in this together.

 

Why Do I Need Terms & Conditions?

To T&C or not to T&C…that is the question ?

When people say the immortal words to me “do I need terms & conditions?”, after I’ve recovered from my initial shock, my reply is ……………………..

well, read on to find out.

Over the years Business owners have said various things to me on the topic of Terms & Conditions, such as:

“my customers are people that I know and have worked with for years, so I don’t need any contracts in place” or

“I’ve not had any problems getting paid in the past, so I don’t need any”

If only things were that simple for business owners. Nobody has a crystal ball and the ability to foresee what will happen in the future. Business relationships can unfortunately turn sour for various reasons. For example, client’s changing their mind on what goods or services they ordered, customers failing to make payments in time as they feel another company’s invoice is more important, or clients disputing the goods that are delivered and fitted, claiming it’s not what they wanted. The list could go on.

It’s the reality of modern day business, and the difference is that companies in 2019 know far more about their rights than they did in years gone by.

So, let’s delve a bit deeper and explore  some of the many  benefits of Terms & Conditions. From a legal perspective the benefits are huge:

  • They provide certainty in terms of what you are offering;
  • They help cashflow by setting out explicit payment terms;
  • They  specify the consequences of not paying on time and what the penalty can be;
  • They can increase cashflow;
  • They can help minimise disputes;
  • If a dispute should happen to arise, they provide a basis to resolve them swiftly;
  • They set out your client’s obligations and what you require from them in order to provide your service;
  • They provide protection for you when handling client data;
  • And last but not least, they form a legally binding contract between you and your client(s).

Again, I could go on, but these give you an indication of some of the many benefits.

Other business owners I speak to are in a different predicament, and one which they think is more beneficial. They already have Terms & Conditions in place, but they have used a template. Templates can be good but only when they are adapted properly. It is the substance that is added to the template that makes it binding, suitable for your specific requirements and legally binding. A template alone cannot be fit for purpose as, by its very nature, it is a generalised document that needs specific information adding to it.

Another scenario which is  a bit similar to this, is when I’m advised by business owners that they ‘borrowed’ their Terms & Conditions from a friend. Now, this is all well and good if  their friends’ business is in the same industry, providing exactly the same goods and services with the same payment terms etc. As this is very unlikely, the chances are the Terms & Conditions are not fit for purpose, and are therefore not binding.

If you have current Terms & Conditions it is important to keep them up to date to ensure that they cover the Goods and Services you supply, your payment terms and to keep termination clauses up to date with how your company operates. To accompany this, it is essential that any laws and regulations which need to be stated within the Terms & Conditions are accurate and legal. One of the first things I look at when asked to review current Terms & Conditions, is to see how up to date the document is, and I can generally spot this instantly when looking to see if there is a GDPR clause included. If this is not included, then they are at least 1 ½ years out of date and this aspect alone needs updating.

So, in answer to the question at the outset, the answer is a resounding YES!

If you are a company that provides Goods and/or Services, you need Terms and Conditions, and I would always recommend a bespoke set which specifically meet the needs and requirements of your company. That way you can be sure that they are legally binding and will work for your company. To ensure that these are drafted correctly, I would recommend that you seek advice and assistance from a professional who specialises in contracts, such as a Solicitor, as they will have the benefit of the knowledge to draft the document correctly for you.

Thanks to Michael Long at MJL Law for this straightforward and straight talking guide to T&C’s!

INSPIRE GROW CELEBRATE – York Business Week is BACK

York business week 2

York Business week 1

The York Business Week Team is bringing you a selection of carefully crafted events focused around four key themes. From showcasing ‘World Class York’ to helping you take the practical steps to start your business with a bang, we will help you take your business to the next level. As well as our own core events we have partnered with some of the city’s brightest businesses and support organisations to bring you a series of insightful and inspirational hosted events.

It’s set to be a fantastic week – Check out York Business Week for full information, but here are a few highlights!

CONFERENCE

On the 13th of November, there is a TOP CLASS business conference on the theme of ‘World Class York’. There is an excellent line-up of speakers in and the event will be hosted by Jon Hammond, former BBC journalist and Governor at York St John University our speakers will include:

William Derby, Chief Executive, York Racecourse , Richard Harpin, Founder and CEO, Homeserve, Noirin Carmody, Co-Founder and COO, Revolution Software, Tim Leigh, Marketing Director, Stage One, Andrew Swift, CEO FERA Science Ltd, Lee Statham, Global Innovation Lead Confectionary R&D, Nestle, Peter Cowling, Director Digital Creativity Labs, Isabel Jago, Product and Communications Lead, York Instruments, Mark Christie, CTO Piksel, and James Browne, Managing Director, Hiscox Direct UK.

You can find the full details here.

START UPS

For newer businesses, there is the Business Growth Showcase…from start up to scale up. Learn how to start, fund and scale your business! York Business Week have teamed up with Make It York, York & North Yorkshire Chamber of Commerce & AD:VENTURE to bring you an exciting showcase event focused on all you need to know to start up and grow your early stage business.

Taking place at the recently refurbished De Grey Rooms, the event will feature inspirational talks from founders and business leaders and a series of panel sessions designed to give you all the information and encouragement you need to go away and do it yourself.

Our speakers will include David Kerfoot, Chair of York, North Yorkshire & East Riding LEP who built up a hugely successful North Yorkshire business. He will share ‘Kerf’s Top Ten Tips’ illustrated by stories and mistakes he made but learnt from along the way. You will also hear from Dr John Park, a serial technology entrepreneur and award-winning academic who has successfully developed and launched products with some of the world’s biggest companies including Procter & Gamble and PepsiCo.

Our panel sessions will provide you with a wealth of expertise, business advice, featuring a range of York based businesses alongside experts from Business Enterprise Fund and the AD:VENTURE Start-up programme, amongst others.

OPEN DAYS

Through the week, 10 companies have ‘open days’ to showcase their business and offer an insight to how they work : You can find more details here.

TEDX

There’s also a TedX event, two themed days (business growth and skills) and a whole range of other events to participate in.