6 Frugal Budget Practices for First-time Entrepreneurs

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Running a small business is quite costly and for most enterprises, it takes 6 months to two years until they are fully profitable. In light of this fact, it doesn’t seem at all surprising that 9 out of 10 startups and small businesses never make it past their first five-year period. What this also means is that in these early stages of your business, every single dollar might be essential to your survival. With this in mind, here are six frugal budget practices that can help first-time entrepreneurs pull through this rough patch.

1.      Cut down on your office supplies

By keeping everything in digital form, you will not only do a huge favor to the planet but to your budget as well. One study indicates that an average office worker prints 10,000 sheets of paper every single year. Needless to say, this is a huge waste, especially in the world where it is so easy to go paperless. Of course, you will still have to print things every now and then, but simply by prioritizing, you can downscale your carbon footprint by quite a bit. Aside from reducing paper consumption, this also helps you reduce your company’s need for ink or toner, which results in much less used toner cartridges as a waste component.

2.      Focus your marketing on customer retention

About 8 percent of all your customers generate 40 percent of your entire profit. Surprisingly enough, return business is quite easy to make if you focus your marketing on customer retention. A person who bought from you has a 27 percent chance of returning even if you don’t do absolutely anything. With the right hand-written thank-you note or at least a post-purchase follow-up email, you might be able to drastically increase this number. Needless to say, each subsequent purchase further tips odds in your favor and makes for an easier job.

3.      Think about your utilities

Don’t take your utilities for granted. Keep in mind that when running an office, you will have a much higher power and water bills than you normally would. Therefore, you shouldn’t be too scared to look for more frugal alternatives. Even though switching from one electric utility to another may be too much of a hassle or even something completely impossible, what you could do is compare electricity prices before leasing an office. In this way, you can pick a region that gives you this commodity and make a frugal choice your company’s budget will benefit from in years to come.

4.      Hiring telecommuters

Another massive boon to your company’s finances can be seen in the trend of hiring telecommuters. Apart from not being obliged to pay for travel expenses, you can also create a scheme in which your company’s workforce consists of equal part full-time and part-time telecommuters. In this way, you can adjust your capacities to the current workload you are facing and not be forced to waste more company resources than you absolutely need to.

5.      Using open source software

The next frugal tip you might want to start practicing is the idea of going with open source software alternatives, instead of purchasing its premium equivalents. A lot of people are so accustomed to platforms like MS Office that the very idea of using Open Office seems foreign, even unthinkable to them. However, paying for an MS Office package for your entire company might be a huge item on your list of expenses, therefore, cutting this expense down may be a step in the right direction. Needless to say, this comparison between office software options is just the tip of the iceberg.

Software

6.      Start your own e-commerce platform

Instead of going through a third-party platform and being forced to pay a fee, you can instead, quite frugally, make your own e-commerce platform. In this way, you distribute items to your buyers directly, maximize your profit and minimize the chance that your audience will suffer due to someone else’s mistakes. In other words, this is not only a money-saving practice but also a great long-term business move.

Conclusion

While some of the mentioned ideas may immediately save money, others generate small savings over the course of time, which makes them particularly suitable for those that are in it for the long-run. Either way, in order to maximize your chances of survival in the early stages of your business, during which it is in its most fragile state, you need to learn how to combine all of these techniques in order to gain a competitive edge and keep continuously pushing your business forward.

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