When you’re scaling a startup, everything is fresh, new, and exciting. Unfortunately, everything is also expensive, as you don’t typically have a ton of financial backing. That means you have to get creative with where you spend and how you spend.
Let’s take a look at a few options.
1. Embrace Remote Work
One of the biggest expenses for any business is office space. Renting or buying a workplace can consume a lot of your budget. So, why not consider remote work? By allowing your team to work remotely, you can save a ton on office costs.
Remote work doesn’t just cut real estate expenses. It also widens your talent pool. You’re no longer limited to hiring people who live nearby. Now, you can find the best talent from anywhere. Plus, many people love the flexibility of working from home, which can make your startup more attractive.
2. Use Automation Tools
Technology is your friend when it comes to saving money. Automation tools can take over routine tasks you or your team normally do by hand. These can include scheduling social media posts, sorting emails, or even managing customer service inquiries.
You can operate more efficiently with fewer people by using software to handle these jobs. This doesn’t mean replacing everyone with robots. Instead, it’s about using technology to make your team’s workload easier so they can focus on more important tasks that grow your business.
3. Be Thoughtful With Hiring
Hiring full-time W-2 employees is expensive and can create challenges when scaling a startup mode. You might need lots of help for one month, while in other months, things go eerily cold, and you no longer need a huge staff. Because of this “up and down” nature of the startup growth lifecycle, it may make more sense to hire on a contract basis.
While you probably know you can hire contract workers for things like copywriting or SEO, did you know you can do this for top-level positions, like your CMO? You can hire a fractional CMO who can take your business to the next level without requiring a massive investment of capital. This gives you access to top business leaders without the need to invest in benefits, bonuses, and other costs that accompany full-time hiring.
4. Form Strategic Partnerships
Another smart way to cut costs is by partnering with other companies. Look for businesses that complement yours. Is there a company that offers services or products that fit well with what you do? You can share resources like marketing costs or software subscriptions by teaming up.
Partnerships can also open up new opportunities for both companies. You can collaborate on projects, refer clients to each other, or co-host events. These activities can increase your visibility and attract more customers without doubling your expenses.
5. Go Green
Reducing your environmental impact can also reduce your expenses. Start by cutting down on waste in your office. This could be as simple as going paperless, which saves money on paper and ink and makes sharing documents easier and faster.
Look at your energy use, too. Switching to energy-efficient lighting and appliances can lower your utility bills. If you have a physical office space, try smart thermostats to effectively manage heating and cooling costs.
6. Focus on Customer Retention
When scaling a startup, keeping a customer is often cheaper than finding a new one. This is especially true for startups. Building loyalty with your current customers can be a cost-effective way to ensure a steady income.
Develop strong relationships with your customers through excellent service and regular communication. Keep them updated with newsletters, offer special promotions, and ask for their feedback to improve your service. Happy customers are also more likely to refer others to you, helping your business grow through word-of-mouth, which is free!
7. Barter for Services
If you’re scaling a startup and money is tight, consider bartering. For example, if you need marketing help, find a marketing professional who might need what you offer. You could provide your product or service in exchange for their expertise.
This can be a win-win situation where both parties get what they need without spending cash. Just make sure to establish clear agreements to keep everything professional and beneficial for both sides.
8. Optimize Your Operations
Take a close look at how your startup operates daily. Are there processes that can be made more efficient? Are you spending money on things you don’t really need? Sometimes, making small changes in how you operate can lead to big savings.
Streamline your processes by using project management tools. Cut unnecessary expenses that don’t contribute to your growth. Every dollar you save is a dollar you can use to fuel your expansion.
Keep Overhead Low to Grow
There are plenty of different ways to go about scaling a startup. Some leaders operate under the assumption that it’s best to grow fast and scale quickly. Others believe in a much more disciplined and intentional approach that involves keeping expenses low as you scale. And as this article shows, there are plenty of sensible ways to do the latter.
As you scale, consider ways to keep your overhead down. It might take you a little longer to achieve your growth goals, but it will also lower your downside risk and help you maintain control over the long-term trajectory. Good luck!
