Smart ways to keep your expenses low when you start a new business
As a new business owner, keeping your expenses low is a smart way to ensure you don’t run out of money, go into debt, or even close shop.
New business expenses can spiral out of control if you don’t track your spending or make smart business investments. Many new business owners run into financial problems early because they overspent while starting their business.
In this post, I am going to share some easy ways to keep your new business expenses low, so you can avoid some common financial problems.
If you are ready to keep your business out of the red, let’s look at some ways to do that.
Please note that this post may contain affiliate links. You can read my full disclosure at the top of the page.
1. KNOW THE DIFFERENCE BETWEEN ESSENTIAL AND NON-ESSENTIAL EXPENSES
When you know the difference between essential business expenses and non-essential expenses, it is easy to keep your expenses low and track your spending.
Unfortunately, lots of new entrepreneurs fall into the mistake of thinking they need everything under the sum to start and run their business.
I am not going to lie. When I started my first business, I overspent on a few things that were not essential for starting or running my business. Those things looked nice, and I thought they made me look like a serious business owner. Alas, I was wrong! But, you live and learn, right?
And, I have learned a lot of things since then.
When it comes to new business expenses, you have to take the emotions out of it and think critically about every purchase. Don’t be swayed by gimmicks or compelling marketing messages. If something isn’t essential to starting or running your business, don’t give it a second look. You can always go back to it when you start raking in the money.
Here are some questions you can ask to determine if something is essential or non-essential.
- Can you start or operate your business without this thing? If yes, it’s essential, if no, move along. For instance, if you are starting an online business, a website would be an essential business expenses. However, depending on the type of online business, you may not need your own personal website at the beginning.
- Do I really need this? What is this for? Sometimes, we make purchasing decisions without asking what the purchase is for or what purpose it serves. Make sure you are clear on this before you invest in it.
- Do I need it right now or can it wait? Okay, there are things that you probably need but don’t need immediately or right now. Anything that falls into this category is non-essential.
- What does it add to my business? Don’t invest in things that add nothing to your business. Everything you invest in should do one of three things. Save you time, make you money, or boost your productivity or make your business more efficient.
There are lots of other criteria you use to determine whether something is essential or non-essential, but if you stick with this list, you can keep your new business expenses low.
2. LOOK FOR FREE OR CHEAPER ALTERNATIVES
An easy way to keep your business expenses low is to use free or cheaper alternatives.
It’s never been easier to find free or cheaper alternatives for any business tool or resource. For instance, you have Keysearch instead of Ahrefs or Semrush. You can use Mailerlite or Mailchimp (with some limitations) for free instead of Convertkit. And, you can find many more examples like this
Now, I know the free or cheaper alternatives are not always the best options, but you can make them work while you grow your business. Yes, you may need to spend more time using free tools, but if it helps to keep your new business expenses low, then I think that’s a good tradeoff.
So, before you invest in anything, do a little bit of research to see if you can find a free or cheaper alternative that makes sense. Don’t choose free tools if they will hamper your progress or make your business less efficient. Free or cheaper alternatives are good, as long as you can still do what you need to, within a reasonable time. Because at the end of the day, your time is precious, and time is money.
Your time is better spent trying to generate revenue for your business, so always consider that before you make any decision.
3. HOW TO KEEP NEW BUSINESS EXPENSES LOW: PAY BILLS EARLY OR IN ADVANCE
You can save quite a bit of money if you get into the habit of paying your bills early or in advance.
Lots of businesses offer discounts for paying your bills early or in advance. For instance, you can save some money if you pay for hosting yearly instead of monthly. That’s just one example. If you are an online business owner, you will have many more opportunities to save some money.
I know many new business owners can’t afford to pay annually for some or all the services they use, but it’s something to keep at the back of your mind. You can budget for it so you can take advantage of these discounts.
Another advantage of paying your bill early is that there’s no danger of incurring additional fees. I don’t know about you, but I really hate paying additional fees because I forgot to make a payment at the time it was due. These payments can add up over time, so it is something you want to avoid. Whether it’s bank fees, back taxes, or something else, there’s no reason to incur additional charges.
Keep a record of your bills and payment due dates. Make sure you have enough money to cover your bills. Having a budget is the best way to do this. If you don’t have one, I highly recommend you do so.
4. BUY THE BEST PRODUCTS OR TOOLS THAT YOU CAN AFFORD
No, this is not a contradiction. Investing in the best products you can afford can also lower your expenses.
Well, think about it. Good-quality products tend to last longer and probably won’t need as much maintenance. New tools will have more life in them than used or refurbished ones, so you will save some money because you won’t need to replace them often.
When you think about saving money, you also have to think about long-term benefits and not just the short-term. I understand that when money is in short supply, it’s hard to think beyond the immediate need or benefit. But, whenever you can, always consider the long-term savings.
I have bought lots of things because they were cheap, but they ended up costing me more in the long run because I had to replace them so many times. I could have saved myself a lot of money by choosing the most expensive option, to begin with.
You always have to make smart decisions when it comes to making business investments. Always weigh the pros and the cons and make sure a purchase will actually save you money and not end up costing you more.
5. DON’T MAKE DECISIONS IN A HURRY OR UNDER PRESSURE
Truth be told, I have bought a lot of things in a hurry. I have bought things I never planned for because they were on sale for a limited time or because they sounded like a good idea at the time.
It’s okay if you have done the same thing. It’s only a problem if you do this all the time or you do this for high-priced items.
Unless you enjoy throwing a wrench in your budget, don’t get into the habit of buying things impulsively. The thing is, as a business owner or blogger, you are going to be bombarded with lots of offers or deals on a daily basis. It can get pretty overwhelming, especially during some specific periods of the year like Black Friday, or when things like Genius Blogger’s Toolkit come around.
Now, don’t get me wrong. It’s always good to take advantage of deals when they come around, but a deal is only good if you can afford it and it is useful to you.
Don’t buy things impulsively because you think you are gonna need them someday (but that day never comes). Don’t be a course collector or tools collector. Buy only what you need and what you plan to use immediately. If you stick to this rule, your business costs will go down and I dare say, you will be more productive.
So, take a deep look at how you make purchasing decisions. How often do you buy things under pressure? How many things have you bought that are just gathering dust (whether digital dust or otherwise)? If your answer, is “Way too many,” then you have to start doing things differently if you want your business to be in a good place financially.
Final thoughts on how to keep your new business low
It’s easy to spend or waste money as a new business owner. No wonder financial problem is one of the biggest reasons new businesses fail.
You have to be intentional and smart about your business finances if you want to avoid financial problems. Thankfully, it’s pretty easy to do.
Focus on buying quality tools or resources whenever you can. Use free tools if they are available. Understand the difference between needs and wants. Pay your bills early or in advance, and finally, avoid impulse shopping as much as possible.
If you can do some or all of these things, you can keep your new business expenses low, and avoid financial stress.
Are you a new business owner? How do you keep your expenses low? Share some of your tips.
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