5 Smart Ways to Save on Startup Expenses

Here are five ways to save money on the most common business expenses.

Larger and more established companies have the flexibility to decide how to allocate their budgets and spend money on resources that make their businesses more comfortable and easier to run. But as a fledgling startup, it’s likely that you don’t enjoy the same luxury!

Therefore, it is important to make every dollar count while your business is still growing. Here are five ways to save money on the most common business expenses:


1. Flexible Office Space

With today’s alternative office space options it’s entirely unnecessary to run out and sign a commercial lease for your startup. Instead, look into incubator spaces, coworking spaces, shared offices and executive office rentals – all of which can provide your company with flexible office space options at a much lower cost.

If you absolutely must have a traditional office for your startup, contact property management companies in your area and ask to see non-traditional spaces or those that the agencies have had trouble renting. With a little negotiation, you can save big on office space that would otherwise remain empty.


2. Office Furniture

One word: Ikea. Although, more seriously, if the world’s leading producer of cheap furniture doesn’t appeal to you, consider seeking out used or consignment furniture stores in your area, hitting up garage sales for discount items or even pulling extra furniture out of your parents’ basement. When you first launch your startup office all you need is a place to sit and work – it doesn’t have to be pretty.


3. Office Supplies

When it comes to purchasing office supplies for your startup, the lesson here is that the best offense is a good defense. Instead of looking for ways to save money on the supplies you think you need, focus instead on eliminating the need for physical supplies. As an example, if you pursue a “paper free” office, you remove the need for paper clips, staplers, staples, hanging files and a host of other associated products.

If you absolutely must purchase some supplies, try cashing in some credit card reward points, purchasing supplies wholesale from your local office supply store, or buying supplies in bulk to lower costs.


4.Shipping Expenses

While there’s no way to eliminate shipping costs — especially if your startup ships physical products — you can cut back on packaging costs by reusing boxes, picking up free shipping boxes from USPS or collecting serviceable packing materials from other businesses in your area (i.e. grocery stores, in particular, get rid of sturdy boxes every day).

When it comes to postage fees, be sure to shop around for the best rates. Yes, you’ll wind up paying something, but you might be surprised by the variability in rates that exists between today’s major shipping carriers, (i.e. DHL, FedEx, UPS, etc.)


5. Staffing Costs

Hiring and training new employees typically represents a very large expense for startups. As such, take the following steps to minimize staffing expenditures:

  • Hire new employees as independent contractors. This will minimize your tax burden and give you more flexibility regarding costs associated with terminating employees who don’t work out.
  • Invest in your interview process. Training a new employee, only to have him or her leave down the road due to a bad company culture fit, represents a tremendous cost to startups in terms of lost productivity. You can reduce this fiscal waste by enhancing your hiring process so that you’re more likely to wind up with suitable candidates.
  • Offer benefit reimbursements – not benefit plans. Although providing employment benefits will help you attract better candidates, it isn’t cheap to set up group health plans or other benefits packages. As a cost-saving alternative, consider offering employees a set monthly reimbursement for benefits that they purchase on their own.


Sujan Patel is the founder and CEO of San Francisco-based Single Grain, a digital marketing agency. With more than 10 years of Internet marketing experience, Sujan leads the digital marketing strategy for companies like Salesforce, Yahoo, Intuit and other Fortune 500 companies.


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