Wednesday, March 12, 2008

Top 10 tips to save money for your start-up

Before you turn to the bank for a loan, think about creative ways to finance your entrepreneurial venture without raising start-up capital from external sources.

Here are 10 top tips:

Start small:

Even if you have a grand vision for your business, concentrate on generating short-term revenue to get enough cash to fund the long-term business idea.

Focus on sales:

Get on the phone and start cold calling. Go for quick wins — contracts that bring in cash and will lead to other sales. Generating cash flow is the immediate goal in order to start building your business.

Concentrate on networking:

Don’t waste money on expensive advertising which can be a hit or a miss. Concentrate on networking and building up contacts, as word of mouth is the most effective form of promotion.

Keep overheads to a minimum:

Work from home if you can and borrow or lease rather than buy expensive equipment. It’s easy to get carried away resourcing a new business, but only buy what you really need to get the job done.

Choose wisely:

Open a company bank account that offers free business banking for start-ups for at least the first 12-18 months. Internet banking makes it easier to keep a close eye on transactions.

Control debt:

Utilise a 0% credit card for essential expenditure, — but be careful to keep debt under control and either pay it off or transfer to another 0% card well before the interest rate goes up.

Invoice your clients in stages:

50% at the half-way point and 50% on completion. Make sure you have clear payment terms in the contract and on the invoice.

Retain cash in the business:

Take as little out yourself as possible. This might mean going without a holiday or you may need to start your business whilst still in part-time employment to cover your bills.

Try business bartering:

Offer your design services in exchange for goods and services you need. This saves you spending cash and can be a good way to develop relations with a new client base.

Put time into PR:

Think of an unusual hook and write a press release or article. Conduct a survey about a topical or controversial issue with your potential customers. Publish the results as a story to attract free publicity for your business.

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