Startups operate on a lean business model to maximize profitability. While saving money is crucial to every startup, it is good to know how and when to cut back on spending. Here are a few tricks every startup can use to save money.

1. Work from home if possible

When offices switched to remote positions during the pandemic, they found that overhead expenses dropped tremendously. Startups have been doing this for years to save on renting office space and the associated costs.

2. Hire contractors instead of full-time employees

Full-time employees are nice, but for startups, they translate to more taxes, paid time off, and benefits that can eat into the bottom line. Contractors are highly skilled, and since they pay their own taxes, they reduce the IRS liabilities for the startup.

3. Creative and direct marketing

Leveraging social media and sending out e-mails to your contacts – even friends and family – to announce your startup is a great way to get customers. There is nothing wrong with inviting everyone you know to follow your startup’s Facebook page, because those people can become customers.

4. Consider partnering with other small businesses

If your startup offers products or services that complement those offered by another business, approach them about a partnership whereby you sell each other’s products in bundles, or refer customers back and forth. You can even incorporate the relationship into social media marketing to reach a whole new audience.

5. Avoid debt whenever possible

Avoiding debt may seem like an impossibility, especially when startups need working capital to get off the ground. Instead of dealing with loan turndowns or taking on debt, consider financing alternatives, such as unsecured lines of credit that do not require collateral, purchase order financing to achieve rapid growth without debt, and even leasing equipment instead of purchasing it.

Learn more today

Golden Century Lending provides financing and marketing solutions for startups that want to keep expenses down while getting access to the capital, equipment, and marketing strategies they need to stay successful. Contact our offices today to learn more.