Starting a brick and mortar retail business is not cheap. In fact, many entrepreneurs raise capital from friends and family, banks and investors to get started. However, finding savvy ways to reduce startup costs of your retail business can improve your cash position over time and enable you to reinvest funding into other priority areas of your business.
Here are five easy ways to reduce retail business startup costs that every entrepreneur can benefit from:
Rent instead of own.
Determine if store supplies and equipment are available for rent from local suppliers. It’s often easier for new retail businesses to pay a small monthly fee for the items they need rather than paying a large upfront cost. While you may end up paying more in the short-term, you will free up the bulk of your startup capital to finance other aspects of your business. As your business grows, you can then buy your own equipment. Also, consult your accountant to determine which necessary and reasonable business-related expenses (i.e. rental fees) you can write-off for your business taxes.
Opt for used physical assets.
Office equipment, computers and office furniture can easily be found at garage sales and thrift stores. You may need to look a little deeper to find specialty equipment. Consider the number of online vendors selling second-hand items, as well. As your retail business grows, you can always replace old equipment with new purchases.
Institute energy efficient practices.
When you own a retail establishment, you can’t shut off the lights or turn off the heating and cooling unit during operating hours. For this reason, energy consumption can take a big bite out of your monthly operational budget. To remedy this, opt for energy-efficient appliances and energy efficient lighting to decrease monthly utility costs.
Use pay as you go software.
Every retail store needs retail software and point of sale systems. Consider signing up with reputable software companies and paying for services as you go. Subscription and pay-as-you-go software rental licenses are cash flow friendly. These options help new retail startups gain access to much-needed software with less cash up front. As your company grows you can buy short-term licenses, rather than pay in full for additional service needs.
Market your retail store, online.
Internet marketing has grown into a powerful platform that allows businesses to instantly connect with consumers. Company blogs, email marketing, online websites and social media platforms give businesses access to a 24/7 marketing opportunity. With the exception of the cost of purchasing a company website, many online marketing platforms are free or low-cost.
Anything you can do to ease the burden of retail startup costs is worthwhile. These simple tips can improve cash flow and position your company for long-term success.
Chris Allen writes for Bepoz POS, a leading point of sale software for small businesses in the United States. Chris often writes on tips and issues that small business face. Keep up with Chris and Bepoz on Twitter.
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