When it comes to starting a business, one of the biggest challenges entrepreneurs face is keeping costs under control. As a startup, resources are often limited, and every dollar counts. Chris Salis, a successful entrepreneur, and startup advisor knows this all too well. In this article, Chris shares his top tips for controlling costs, so startups can focus on growing their business.
Create a budget and stick to it: A budget is a crucial tool for any business and is especially important for startups. By creating a budget, entrepreneurs can identify their fixed and variable costs, prioritize expenses, and ensure they’re not overspending. Once a budget is in place, it’s important to stick to it. Chris suggests regularly reviewing expenses and making adjustments as necessary.
Keep an eye on fixed costs: Fixed costs, such as rent and salaries, can quickly add to a startup’s budget. To keep these costs under control, Chris suggests looking for ways to negotiate better deals, such as finding more affordable office space or negotiating salaries with employees.
Be mindful of variable costs: Variable costs, such as materials and supplies, can also add up over time. Chris recommends that startups track their expenses closely to identify areas where they can cut back.
Utilize technology: Technology can help startups automate tasks and streamline processes, which can ultimately help them save money. Chris suggests looking into cloud-based software and tools, such as project management and accounting software, to help startups keep costs down.
Outsource when possible: Outsourcing certain tasks, such as accounting or marketing, can be a cost-effective way for startups to access the expertise they need without having to take on the expense of hiring full-time employees.
Manage cash flow: Cash flow is critical for startups, and Chris emphasizes the importance of keeping a close eye on it. It can be done by creating a budget, tracking expenses, forecasting future revenue, and ensuring enough cash reserve to cover unexpected expenses.
Be mindful of your team size: Startups need to be mindful of the number of employees they have, and hiring too many employees too early can put a strain on finances. Chris Salis suggests that startups should only hire when they are sure they can afford it, and the employees will bring in more revenue than they cost.
Focus on what you do best: Startups should focus on what they do best and outsource the rest, and it will help them control costs and allow them to focus on their core competency and grow their business.
Controlling costs is essential for the success of any startup. By following Chris Salis‘s advice on creating a budget and sticking to it, keeping an eye on fixed and variable costs, utilizing technology, outsourcing when possible, managing cash flow, being mindful of your team size, and focusing on what you do best, startups can ensure that they are making the most of their resources and positioning themselves for long-term success. Chris stresses that cost control is not about cutting corners. It’s about being smart and efficient with the resources you have.