10 Ways To Reduce The Cost of Starting A New Business

10 Ways To Reduce The Cost of Starting A New Business

10 Ways To Reduce The Cost of Starting A New Business

Today we will discuss 10 of the best Ways to Reduce the Cost of Starting a New Business. You can start your business even with a small capital. It is not necessary to take a loan from a bank or borrow from friends. This confirms the experience of Multinational companies: 71% of entrepreneurs open a business on their own funds. Nevertheless, money is not always enough. In order not to abandon the idea, you can optimize costs and open a business with minimal investment. In this article, we understand what steps need to be taken to start a business and not burn through.

10 Ways To Reduce The Cost of Starting A New Business

10 of the Best Ways To Reduce The Cost of Starting A New Business

1. Take Money from the State

Part of the money to start a business can be taken from the state. It is interested in the emergence of new jobs and is ready to allocate grants to start-up entrepreneurs. To qualify for a grant, you need to get unemployed status in an employment center, write a business plan and protect it before the commission. The size of the subsidy depends on the region and averages about $1530. This money does not need to be returned, they are given free of charge.

This method has many nuances, such as the need for dismissal, endless trips to the employment center and reports. But 100 thousand rubles will not be superfluous. In addition, so you will, willy-nilly, make a working business plan and be able to get help with the paperwork.

2. Choose A Bank With Favorable Terms

When opening a business, you will need a checking account. Many banks offer this service, but everyone’s conditions are different: they compete for customers, so they give different bonuses, privileges, and discounts. If you use them, you can great save. Here's what to look for in order to reduce starting costs.

Free Account Maintenance

So you will save 1000$-1500$ a year. Pay attention to the tariffs: you can take a commission for transfers, the receipt of money on the account and cash withdrawals. Decide which operations you will most likely conduct with the current account, compare offers with different banks and select the most profitable ones.

Business Card with Bonuses And Discounts

Usually, it is issued by the bank in which you open a current account. This is a payment card, only for a legal entity or individual entrepreneur. It simplifies the process of paying expenses through a checking account, speeds up processes and allows you to control expenses. An individual entrepreneur on a simplified taxation system can pay her any purchases - no need to transfer money to a personal card and pay a transfer fee. Even a 1–2% commission on the transfer amount is a waste that can be avoided.

Business Development Bonuses

Many banks give additional bonuses: a budget for promotion and contextual advertising, a discount on website creation or shipping, free access to services (CRM systems, telephony, and accounting). The study offers of different banks and evaluates what is more profitable for you.

Free Shopping Acquiring

It is necessary to accept payment by credit cards, and not just cash. This service saves money at the start: it is better to rent a POS terminal and pay a commission on turnover (1.5–4%) than to buy a new one and pay for the installation.

3. Choose the Right Taxation System

This is boring and dreary, but take the time and look into the topic. It depends on how much money you will give to the state and how you will begin to report. The simplest system is the simplified income tax system. It is suitable for those who provide services and have small expenses. For example, if you have a small law firm or a dance school.

There is also the simplified payment system “Income minus expenses”. It is suitable for a business with large expenses. For example, if you have an online store and you buy goods from suppliers. UTII (single tax on imputed income) is more suitable for retail trade and cafes, for agricultural business - UAT. If you do business with large federal companies or budget organizations - ESSE.

In addition, there is a patent system of taxation. It may be more profitable than the STS or UTII, but not suitable for all types of business. Each region has its own list (it is selected from the general list approved in the Tax Code).

4. Use Online Accounting Services

The entrepreneur needs to pay taxes and fees. If you are IP at USN without employees, you can use free online accounting. This is offered by some banks and accounting services. With its help, you can submit a declaration and submit tax reports.

If you have at least one employee, free services will not work. State accountant costs business, on average, at 50–100 thousand rubles a month. Costs can be reduced if you use paid online accounting services or hire an outsourcer.

5. Make A Website Using The Designer

Almost every business needs a website. You can order it from an agency or freelance programmer, but the development will require at least 1000$–1500$. And in order to edit or add information, you have to go at an additional cost. If you have a small business, then this is useless. It's easier to create a website yourself in a convenient designer and promote it in search queries. It is included in the best Ways To Reduce The Cost of Starting A New Business.

6. Rent An Online Cashier

From 2018, almost all entrepreneurs are using the online cash register. You can buy it, but with the installation and setup of the device, it will cost tens of thousands of rubles. At the initial stage, such expenses are inexpedient - it is better to rent an online cash desk for 3-4 thousand rubles per month than to withdraw 40-50 thousand from the budget.

7. Save on Freight (Ways To Reduce The Cost of Starting A New Business)

If you repair the premises, transport furniture or make bulk purchases of goods, you will need the services of freight and movers. There is high competition in this area, so don’t be in a hurry to agree to the price that you are offered in the service of a taxi. You can find a car cheaper on Olx, Avito, or in Vkontakte groups - private traders submit ads there.

8. Hire Employees Gradually

At the start of a business, you should not hire a full staff - do it as you grow. So you reduce costs and be able to quickly bring the business to zero. The first time you have to work a lot yourself. For example, make coffee instead of baristas or meet guests instead of administrator. But this will allow you to better know your customers and correctly build processes. With this knowledge, it will be easier for you to hire staff and formulate job responsibilities.

====> Read Also: 6 Easy Steps to Start a Freelance Web Design Business

9. Search For Cheap Rentals

Due to high prices for commercial real estate, start-up entrepreneurs cannot afford to rent a room with high traffic. And yet the success of a business largely depends on its location. If you find a suitable room, ask the owner for a rental vacation during the renovation, and if you are doing a major overhaul, try to arrange for a longer period. If the business allows, work at home or in co-working, and meet with colleagues and partners in a cafe.

Another way to reduce costs is to rent an office. These are in many regions and the rental price there is significantly lower than the market.

10. Buy Used Equipment And Furniture

Much of the cost goes to the purchase of equipment and furniture. Instead of buying new, find a used on a popular marketplace. It is sold by entrepreneurs who close the business and want to discourage at least part of the costs. This last way is consider the best Ways To Reduce The Cost of Starting A New Business.

It is important to save wisely. The efficiency of the business depends on the equipment: if the coffee machine breaks down, you cannot make coffee, the hood breaks, there will be smoke and unpleasant smell in the hall, the freezer will break down - semi-finished products will disappear. Therefore, it is better to find a technician who assesses the state of the equipment and tells you whether to buy it.

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