So, you’ve taken the plunge. You have decided that the world needs to know about your amazing idea or product, and you have spent the last few years, months or weeks introducing your new startup to the world.
But then, all of a sudden, through no fault of your own, the markets start to look decidedly unstable, and there is talk of shaky interest rates, soaring energy bills, off-the-chart inflation and the far-reaching effects of war in Eastern Europe potentially causing another global recession.
All of this can seem extremely daunting and you might just be reconsidering your decision to enter the world of business ownership. ut, this might not have to be the case if you make some shrewd decisions now, to future-proof your new business, and make sure you are able to effectively manage your spending in a difficult economic climate.
Carefully Track All of Your Spending
The first and most basic thing you can do to make sure your new business is effectively managing its spending is to make absolutely sure you have an effective way of tracking your expenses. It might seem basic but it really is essential!
Having a good idea of what your startup is spending on a daily, weekly, and monthly basis will ensure that you will be able to quickly detect any costs that might be unnecessary, ineffective, or simply too high. Using accounting software can be an effective way of keeping an eye on the daily expenditures of your business and tracking down the issues before they get too large.
Utilise Expert Advice
Always ask when you are unsure. If you are worried about how you might manage the spending of your startup, why not seek advice from an accountant or fellow CEO?
Accountants can be engaged for relatively small fees and are experts in finances – it’s literally their job, after all – and having an expert on board might just give you the edge that will help your business make it through a tough economic climate. It is also worth seeking out other small business owners where you can, as they will often be able to advise you very effectively, due to the fact they will have been in your shoes and know what it takes to survive.
You could also consider joining the Federation of Small Businesses which, for a very low fee, offers financial support, business advice and a whole host of other benefits to small business owners and startups.
Reducing Operational Costs
The two largest costs for most small businesses are; labour and workspace and, logically, should be the first place one would go when looking to reduce costs. But, with most startups, the labour cost simply cannot be reduced due to the essential nature of all the employees.
The workspace, however, is often a place where savings can easily be made and recession-proof options can be found. A start-up space in a flexible serviced office can be the perfect solution, as they offer packages that include high-speed internet, phone calls, great city centre locations, secure desks and offices and, in some cases, free gym memberships, for an all-inclusive monthly price.
Don’t panic when the news of economic decline seems overwhelming – just take some simple steps to make sure your startup can effectively manage its spending during any tough economic climate, and continue to thrive.