The competition in the startup ecosystem is aggressive. And the early stage for a tech startup is one of the hardest phases for their business. The team might be incomplete, the product needs refinement and you are sourcing funds and resources.
Therefore, it’s right from the early stage that you need to keep track of every penny and save as much as possible to grow your venture.
In this article, I’m going to discuss five tips for a tech startup to save money.
Without further ado, let’s dive in:
Avoid renting an office
You don’t need a posh office on the seafront right from the beginning. Instead, go for a shared workspace or home office.
It will help you save a considerable amount on rent, overhead expenses, and even electricity bills.
You can even rent a coworking space for the moment or set your war-room in a corner of your house. But, avoid renting a dedicated office. It might not be fully utilised.
You can choose to work remotely too, syncing with your team members over the internet.
Buy used equipment
You can save a handsome amount by buying used equipment instead of brand-new ones.
Second-hand office furniture used devices, and other electronic equipment will often cost only half of their original price, while still working fine. So, find out ongoing auctions, newspaper classifieds or markets which deal with used goods.
Also Read: Can overfunding kill a startup?
However, you need to ensure that electronic equipment – laptops, mobiles or other gadgets, you buy, come with the latest technology. Outdated devices will affect your performance and upgrading them can be a costly affair.
So, take precautions when buying used equipment.
Adopt BYOD Work Culture
Adopting a BYOD (Bring Your Own Device) work culture can save you a significant investment for your tech startup. You won’t need to purchase laptops and smartphones for each member, and you also may not have to get enterprise licenses for different apps and software.
Also, your teammates will find it more productive to use their own devices and preferred software when possible.
However, if data security is a cause for concern, you can put everything on the cloud. Cloud storage and cloud applications aren’t only secure but also are cheaper than regular applications.
BYOD work culture along with a cloud-based work environment can save you a lot of pennies.
Negotiate with vendors
Negotiation is an art, and you have to learn it by heart. There’s no shame in asking for discounts. And you’ll be amazed to see that many vendors will oblige to your request.
Before accepting a quote, check the rates of other players in the market. Some will have a promotional offer rate while others will give a discount on bulk buy. You can also get substantial discounts if you settle for a longer contract period.
Local businesses might provide additional discounts if you buy from them regularly. You can even save money by paying the entire amount in cash, instead of asking for a credit.
Vendors are often open for negotiation, so go for whichever option gets the work done.
Track your money
An accountant is essential if you’re looking for opportunities to save money.
Although having an accountant might seem like an added expense, but hiring one at an early stage can help you be on the right track.
Also Read: Sealing the deal: How to get the upper hand at the negotiation table
In addition to helping with your financial reports, an accountant can also offer expert guidance on budgeting and capital allocation. After all, you can’t afford to spend money mindlessly. Here is a good resource to compare accountant prices to get the best deal for your tech startup.
Optimum use of available resources is of prime concern and an accountant helps you with that.
By avoiding to pay for an office or new equipment, you can have a considerable saving without affecting the day-to-day proceedings of your tech startup. The BYOD culture, careful negotiation, and an accountant will further strengthen your cash reserves.
What about you? Do you want to share any other money-saving tip for a tech startup? Please leave it in the comment section. I’d love to know about it.
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