Becoming an entrepreneur is exciting. The thrill of becoming your own boss and making your own hours is usually what attracts people to this lifestyle. Though, when starting a new business, you have to cut costs not only in your professional life but also in your personal life.Â
The reason is because your business is new, and people are just starting to get comfortable with your brand, so money flow is not always reliable within the first few months. To ensure your business has a long-standing run, you have to prioritize your personal and business finances to have money to cover your expenses even when income is slow.
On a personal level, that can consist of you buying cheap used car auto insurance. While on a business level, it can resemble taking on interns instead of full-time employees, there are various ways to cut costs when starting a business. Making those cuts is 10 times easier when you have a guide to follow.
Reorganize Your Personal Finances
Taking time to reorganize your personal finances is easily the most important step that you as an entrepreneur can take when starting a business. There is no way that you can cut costs if you are not 100 percent sure of where your money is exactly going.
So to start, you should take an inventory of all of your income and expenses. Create one column for your income and another for your expenses. In the expenses column, you should annotate everything that comes out of your bank account. It does not matter how big or small the payment is.
Once you have all your expenses and income written down in detail, you can reorganize your finances better by using the 50/30/20 financial management model. When using this model, you will use 50 percent of your funds for necessities (bills, groceries, mortgage, rent, etc.), 30 percent for spending money (clothes, travel, fast-food, hanging out, etc.), and 20 percent for savings.Â
Now, once you detail your income and expenses, you may realize that you do not have enough income to split your finances into those three brackets, and that is okay. You can look into passive income to increase cash flow and cut your expenses by using the following tips to increase the amount of money you have.
Cancel Subscriptions and Find Cheaper Alternatives
Gym memberships, magazine subscriptions, video streaming, and mobile app fees are just a few of many recurring expenses that people often overlook when trying to save money. It is so easy to sign up for subscriptions or services on the internet, so most people are signed up for things they are not even using regularly.
The same applies to the type of insurance, cell, and cable services that we use. After having a specific service for so long, it seems easier to stick to that same company. Though, over time there may be cheaper alternatives. You could be spending a fortune on your car insurance compared to how much money you could save if you were to transfer to a competing company.
In most cases, you can save money by canceling subscriptions and memberships you do not use regularly and by looking for cheaper alternatives to your insurance, cable, and phone companies.
Shop Off-Brand and Discounted Products
Most grocery and retail stores sell products under their own brand name as well as popular on-brand names. Usually, the only difference between the products is the brand name and the cost of the item. Store brand products tend to be cheaper than the popular on-brand items because they do not have the development, research, and advertising costs added to them as the national brands do.
A fair amount of people assume that these cheaper private brands are cheaper in quality as well, so they avoid purchasing them, but that is not always the case. As stated earlier, they are generally less expensive because they do not have to pay for the added association of being a famous brand.Â
Your local store does not have to pay as much for advertising because their items sell themselves. Customers are coming into the store already to purchase name-brand products they see in commercials, but once they are in the store, the store’s brand is positioned at the eye level and at a lower price. There is no need for the store to advertise their brand of products.
Alternatively, if you are not comfortable shopping for off-brand items, you can use coupons or shop discounted items only. Stores often offer rewards, points, or extra coupons to loyal customers who sign up for the store’s membership program.Â
Contract Smart, but Inexperienced Individuals
 When starting a business, it will take some time to figure out the type of people you need to hire to bring your vision alive fully. As an entrepreneur, you will have to get used to finding opportunities in failure because you are not always going to hire the right person. Being said, this is why you should not hash out a lot of money for employees at the start of your business.
Your company is new, and it is still getting a feel for how it needs to operate to be successful for a long time. There will be a lot of trial and error with how you operate, who you hire, and how you hire. This is why you should start by hiring interns that are working on getting school credit or contracting smart individuals who have little experience.
Besides saving money, it is easier for your business to find its own identity when working with individuals who do not have as much experience. If you cough up a lot of money to bring in someone who has years of experience, there is a chance that they will transform the operation of your company into one that is too similar to a competing company.
Though it may be beneficial to your company’s progress temporarily, there is a chance it will not succeed long term because the goal is to create something new and better — not to recreate what is already thriving. Â
Take Advantage of Social Media for Marketing
One of the ways you can tell that your business is a good or bad idea is by how your social media community interacts with you after you engage with them. No matter how large of a following you have, if you are offering useful content or products, they will engage with your brand.
Social media is the most straightforward and most inexpensive way to reach out to your ideal audience. Outside of going to a company’s website, searching social media is a common way to find more information on a brand.
You should share useful, funny, and engaging content on your media sites regularly, following an hour to two-hour schedule. This is where you post every hour or two hours. If you are posting on Facebook or Instagram stories, posting every hour will keep your feed at the top of your followers’ timeline.Â
Also, you should share high-priority content during peak times. These times are around noon when people are eating lunch, around 6 p.m. when people are settling in at home from work, and at 9 p.m. when individuals are putting their children to sleep and taking some personal time to engage with the outside world via the internet. Â
Social media is an inexpensive way to market your brand to new individuals. It is something that I recommend all new business owners start with before spending a lot of money on more traditional forms of advertising.
Imani Francies writes and researches for the auto insurance comparison site, 4AutoInsuranceQuote.com. She earned a bachelor of arts in film and media and specializes in various forms of media marketing.
