Jason Calcanis provided some really useful tips a while back about how to save money when running a startup. While they’re great tips, a lot of them don’t apply to budding entrepreneurs who are simply trying to save money during the actual “startup” part (buy an expresso meeting for how much?).
Here are some tips to help you save money when starting a new business:
1. Don’t get an office (until you really need one)
Small startups can usually get by with online communication and phone calls, but if you need an occasional meeting room try to rent one or use public spaces (coffee shops and university libraries). Group conference rooms are sometimes available for rent in corporate buildings. Conduct small meetings in virtual conference rooms such as Campfire (free to cheap) or Tangler (free) for everything else.
2. Share living space
If your team is small enough and compatible, try sharing living space. Rent is always cheaper when it’s shared and often times you’ll see an increase in productivity when staying with your cofounders. Living together also can reduce food expenses if you decide to cook and have dinner as a team (doubling as a meeting).
3. Use sponsors when marketing
We were able to save $2,000 when we decided to bring in sponsors for our advertising campaign. Our sponsors gave us a budget to work with and in return, we promoted their services when we gave a prize at the very end of our campaign. It’s not the ideal situation for everyone but does work for a lot of people. If sponsors fall through, you can apply for loans online as a last resort. It’s a quick fix but should be chosen responsibly.
4. Invest in at least 1 nice LCD per person
When I first hooked up my old 13″ Macbook to a 24″ LCD, I saw my productivity increase at least two-fold. You not only get more screen real estate to work with, it just feels better working on a larger screen. Throw in a wireless keyboard and mouse and you have a solid workstation AND laptop for a cheap price.
5. Buy a decent chair but Areons can wait
Our team uses pretty nice leather executive chairs we got at a discounted rate from a wholesale furniture outlet. While they’re not as comfortable as Areons, they cost us a LOT less and still provide us with comfort throughout the day. Just make sure to take an occasional stretch and you’ll be fine.
6. Hire college students
College students are ideal for new tech startups, as they’re smart, well connected and cheap. See if your local university has a credit program that will allow you to take on interns that receive course credit for the work they do for your company.
7. Reduce other unnecessary costs
You probably don’t need 2,000 business cards if you’re still in the developmental phase of your business. You also don’t need to print t-shirts for you and your friends, unless your marketing plan calls for it. For most tech companies, you probably don’t need a $400/mo server until you’re ready for launch – use a VPS and move to something bigger when needed.
8. Take a salary cut
Until the company is showing solid numbers, the founders of a new tech company should be getting paid enough to get by – that’s it. Tough it out for now and it’ll pay off in the future. While the founders can still work passionately with minimal pay, don’t skimp out on your employees. Pay them modestly and make them feel like they’re an important part of the team.
I’ll add more tips as they come to mind, if you have any more feel free to leave a comment.
This is one of the original DevGrow article’s from 2008 that was lost in transition to the new version. I’ll be posting a few more oldies in the next couple of days (at least the good ones).