Even the best startups struggle with cash flow, but here’s how to remedy the situation.
No matter how careful you are with the budget, how impressive your concept is, or what resources you’ve tapped to start the business, eventually your startup will run into some tight financial issues. Even if you’re profitable on paper, keeping a positive cash flow is a full-time job, and eventually, you may be forced to cut costs so you can operate leaner and more efficiently.
But how can you cut your operating expenses without compromising the quality of your work?
1. Downsize (or eliminate) the office. Office costs can be egregious, especially in a big city. When your business starts, you may be tempted to find a space you can grow into, but all that extra space may end up wasted. Instead, look for a smaller space to start—or consider eliminating the office altogether and going fully remote.
2. Consider alternate forms of compensation. If you want the top talent on your team, you’ll need to pay some top salaries—or do you? Consider some alternative forms of compensation, such as shares of the company, to ease the burden of cash flow on the business.
3. Focus on the minimum viable product. Don’t worry about all the bells and whistles of your brand and product. Instead, focus only on the product, services, and structures that stand to generate revenue right now. The sooner and more consistently that revenue flows, the more stable your business will become.
4. Prioritize inexpensive marketing. Marketing and advertising can be expensive, but they’re still necessary if you want to attract more attention to your business. Prioritize inexpensive marketing tactics, such as content marketing and social media marketing.
Together, these four strategies should be enough to save you several thousand dollars a month—or even more. Put them to work the next time your back is against the wall as an entrepreneur, and keep that revenue flowing.