As aspiring entrepreneurs, failure is not something that we would like to think about. Yet it is often said that 8 out of 10 startups fail, with main reasons being inadequate capital and excessive cost overrun. Minimizing costs and staying lean should therefore always be a priority for entrepreneurs when first starting out. So what can be done to cut down initial costs during the early stages of building your business? We are going to break down the top 4 ways to help your business stay lean.
Think Big, But Start Small
It is exciting to have a ground-breaking business idea in mind, and you can’t wait to put it into action. While having a grand vision is good, it is important not to let your excitement get in the way of practical concerns. As a startup, splurging on fancy business cards or stocking up on large amounts of inventory, for instance, may not be necessary. Instead, do things the smart way and know the importance of testing the water. Spending money on fixed costs such as administrative support staff and lavish office space (more on this below) can really increase your overhead, which is not ideal especially when you are still figuring out your business model.
Rent flexible office space
Office rental expense accounts for a large portion of business startup costs. On average, startups pay upwards of HK$10,000/month for office rent and typically have to commit to long-term leases of at least 1 to 2 years. Yet as a new business just starting out, there are many uncertainties down the road and it can be challenging to accurately predict your team size in 6 months’ time, much less 2 years later. Quikspaces offers up two possible solutions:
Ditch the lease
Flexible instead of lengthy contracts is one way to lower rental costs. Our platform provides a modern office space solution to small to medium-sized companies, so that you can rent a decent office space in your location of choice at an affordable price with no minimum term. This way, you can avoid being locked into a contract that could potentially be detrimental to you in the future.
Share Your Office
Another way to save money on office space is to list it out and share with other companies. By sharing your office space, you can save on overhead and spread the cost of office furniture, utilities and of course, rent. In addition, you might be able to develop new partnerships or find your next customer through sharing your office office space.
By choosing to work out of a shared office space, companies are able to dynamically scale up or scale down their office space according to business needs by signing short-term agreements rather than being be locked into a financially-draining long lease. Drop us an email if you would like us to send you some customized office recommendations.
Building your business from scratch is hard, so being economical is good, but what’s better than doing it free? There are in fact an array of marketing tools or other secretarial options available online. Of course, many software charge for advanced functions, but you can still get a lot of utility from free software even by just using their basic functions.
At Quikspaces for example, we highly recommend using Canva, a free and easy-to-use online design tool that enables anyone to become a designer. Free stock photo sites such as Pixabay or Freepik are a great resource as well. Another go-to tool for us is Trello, a free productivity tool that helps us manage our tasks and stay organized as a team.
Keep in mind that even many paid software offer free trials, sometimes up to 30 days, which is definitely useful for you to try out the software or even complete the entire task you have on hand. Keep in mind, your primary goal is to save cash.
Are you a budding entrepreneur hoping to build up your networking game by attending as many events as possible? Then you’re on the right track because in business, it’s all about who you know. However, the key is to firstly, select the most relevant events to attend to maximize the quality of connections you make, and secondly, to follow up post-event. By expanding your network and building meaningful relationships, you will have an arsenal of resources to turn to for your business needs, whether it is legal advice or event venues for your next company event. Having someone in the know can save you a lot of time and money, so it pays off to know more people.
Managing overhead costs will always be a challenging issue for any business and startups are no different. Good thing is, the saying that 8 out of 10 startups fail is just a myth, as statistics have shown that 50% of all startups make it to their 5th year and a third of it make it to their 10th year. Once your business is up and running, anything is possible. With tons of hard work, dedication, time, and a pinch of luck, your big vision is good to go.
If you are interested in finding a flexible office space for your business, feel free to email us and we will contact you shortly.