Every startup needs some amount of time before it hits the black as far as cash goes. However, being too far in the red can mean that you will have a difficult time keeping the business running. Even during the startup phase, you will have the usual costs of employees, insurance, equipment, and other operational needs. If you are too far in debt, it may be too difficult to find your footing so that you can continue to build your business and brand. Here are four ideas for saving a startup that is slipping too far under.
Suspend your income
You and the partners of the business can decline to take an income from the startup until it is viable. This may mean doing freelancing or extra work outside of the startup in order to personally make your finances work. Suspending the income of those who own the business means that tens of thousands to hundreds of thousands can go back into the business each year.
Keep the employee circle small
Long nights are something that may be required when you are beginning a startup business. Paying unemployment insurance, benefits, and other necessities for many employees can quickly sink a budget. Begin your business by operating a skeleton crew. Keep the amount of business employees small and contract out on a temporary basis to freelancers or independent contracts as necessary. This will keep extra costs low.
Partner with another business
If you can find a business related to yours but not a direct competitor, joining together for advertising and operating your companies can decrease each companies bottom line. For instance, if you run a brand new tech company that is producing a new phone or tablet-like product, you can partner with a battery company or a company that offers accessories. Joining budgets means more to work with and more to save.
Run out of your home
Overhead is unnecessary unless you need a brick and mortar place to sell products. Leave your building and work remotely, while leasing a warehouse to hold your products. Working from home can make running the startup successful and give you time that you ordinarily would not get to spend with your family due to the time commitment. If one person has more space, ask to run out of their home and pay their telephone, Internet, and partial electricity bill to make sure that they receive proper compensation.
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