Saving On Admin Costs: 6 Tips for Startups
When choosing the best credit card for your startup, one of the expenses you use it for is administrative costs. Every office has administrative costs; while they look low, the upkeep is unbelievably high. Most of these expenses are fixed, but that doesn’t mean you can’t save money.
Figuring out administrative costs that you can take out from your startup is essential in improving your profitability. Here are x tips that startups can do to get better flexibility from their administrative spending.
1. Rent Equipment – For Now
The biggest problem for startups is buying the equipment they need to start. This often becomes a problem when teams are short on cash, as many of these materials are crucial for your operations. At the same time, they’re usually not your final product, so these assets don’t contribute to rapid growth.
Instead of purchasing new assets, consider renting them instead. Rented equipment can cost less than buying your own, and procurement shouldn’t take too long. You just have to ensure it will save you time, effort, and hassle without much impact on the product or service you’re offering.
By renting equipment, you can reduce your upfront costs until you can buy your own. For example, securing your data is best done through a rented cloud server until such time that you think a data center works for you.
2. Go Paperless
Another way to cut costs is to go paperless. While you may be planning to keep your paper documents for as long as possible, it’s inefficient and unproductive. Not only will you increase your printing cost, but you’ll also waste precious space in your office.
Implementing an electronic system is one of the fastest ways to start going digital. In the back office, you can implement a program like Dropbox or Google Drive, which you can use for file sharing. And in the office, you can use electronic signatures or e-signature software.
For internal communication, you can switch to encrypted emails. With these kinds of services, you can reduce reliance on printed materials and improve your teams’ productivity. Another area that will benefit from going paperless is your financial process. Automating your financial processes streamline your cash flow, saving you time and money.
3. Cut Unnecessary Services
Aside from renting equipment and going paperless, another way to reduce operating costs is to cut unnecessary services from your office. Think about your operational needs. Do you need a full-time receptionist? Do you need a whole team for accounting?
It doesn’t make sense for bread-and-butter services like these to work full-time. You can cut down their hours or choose only to assign them to certain tasks. For big projects, you can always hire freelance consultants.
Some tasks that you may want to outsource include customer service, accounting, and fraud prevention. These involve plenty of manual work, which an offshore provider can handle. With a competitive rate, you can cut your operational cost and free up more funds for the growth of your business.
4. Use Automation Systems
One way to improve the efficiency of your workflow is to implement automation systems. With automated systems and solutions, you can improve the speed of your day-to-day operations. Sometimes, you can automate tasks and functions that typically take you days.
For finance and administration, you can implement an open banking system to let everyone access your account. An open-banking system allows you to give access to your people so they can get their job done. For accounting and payroll, you can look at SaaS and other leave management systems.
You can set a separate budget for paid advertisements and content for marketing. This will allow you to automate your daily marketing budget. Whenever your ad campaign expires, the system will automatically stop your ads.
You can manage your administrative tasks more efficiently with the right set of tools. This means more efficient and productive workflows, which translates to more productivity and profit.
5. Refinance Debts When It Makes Sense
Startups and small businesses are notorious for being cash-strapped. Sometimes, the money coming in is insufficient to cover the business’s costs. When this happens, you have to find ways of getting funds.
One way to get funding is through loans. You can cover your short-term overheads and pay down some of your debts by getting loans. However, if you have an obligation from different sources, one of the best ways to save money is to refinish your debts. You can get lower interest rates and payment terms by renegotiating your loan terms.
Talk to different lending companies, so you can compare their offers. While looking for lower rates, you also need to look at the various fees they charge. Negotiate better terms and interest rates only if it makes sense.
6. Cut Down On Travel Costs
One of the areas where your operational costs are crammed is travel. Traveling can be expensive, especially for business trips, so if you can cut down on travel expenses, much better. If you can’t help the need to travel, make sure to book flights and accommodation in advance.
If your hotel serves breakfast, you might consider having your whole group stay on site. This will eliminate the need for meals, which can quickly eat up your entire budget. You can schedule meetings back-to-back if you plan to have meetings at different times.
You should also scout around for the best amenities. Look for places that offer free parking and laundry, so you don’t have to spend extra money on these. You can use these as leverage with present deals.
Rather than spending money to travel, you can opt for video conferencing or messages. Video messages are faster and cheaper, and it can also be easier to control the amount you spend on video messaging, so you can maximize its potential.
These messages and calls can be done from anywhere, so you can minimize travel costs for out-of-town training and workshops.
The Bottom Line
In the first few years of your operation, you must be creative with your resources; the more you can cut costs, the better your position is. You can start setting these savings aside so that whenever it pays off, you can use them as soon as possible.
Remember that the key to reducing costs is efficiency. If you want to reduce costs, you have to make sure that you only invest in things that give you value for money. Follow these tips to maximize your finances and skyrocket your growth today.