4 Things You Can Do to Ensure Your Startup Will Become Profitable
Small companies simply have to keep their finances tight in order to survive in the market. These tried and true practices can help startups to stabilize their balance sheets and successfully navigate through challenging periods.
You have to spend money to make money, the old saying goes. However, if you spend more than you can realistically afford and sales are slow to materialize, your business could go under the ice before it ever gets off the ground. Maintaining the right balance is a valuable skill that can only be perfected after years of experience. That’s why any small business owner could use some good advice in this regard:
Be Smart When Hiring
Salaries are one area where you don’t want to be too stingy – poorly paid employees are unlikely to be properly motivated for the job. Of course, the other extreme can be just as damaging, as overpaying your staff without justification is a surefire way to drain your budget within a few months. You should economize where you can and keep the number of workers lower than you’d prefer until the revenues grow to a sufficient level to support further expansion.
Control Your Expenses
It is necessary to foot the bills for office space, phone use, travel expenses and other necessities, and many startups are struggling to keep up with the operating needs. The truth is, it is usually possible to do more with less and if you really give a hard look to the calculation, you will see where the savings can come from. This money might be better spent on developing a new product or acquiring the latest equipment necessary to raise the quality level. The goal is to run a cost-efficient business that makes the most out of limited resources.
Hunt for Free Promotion Space
Spending a fortune on a huge launch event and the corresponding media campaign might be a good strategy for big brands, but startups must be mindful of such extravagant moves. Instead of paying in cash for every bit of publicity, small companies would do better to find ways to get the word out for free. This may not be as hard as it looks – local media might be willing to report about the new business while online marketing channels and social networks offer the chance to reach international audiences without investing a huge amount.
Keep Your Credit Lines Open
Borrowing from commercial banks is the option of last resort when the times get tough, but this can become a trap if you don’t meet your obligations in time. If things start getting out of control, it is important to take immediate action and consolidate your debt under the best conditions available. If left unaddressed, this problem might balloon beyond resolution, forcing you to close your business and sell off your assets. That’s why you must manage your debts very diligently and look for alternatives as soon as you realize that your credit situation is getting slippery.
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