For all the attention that successful startups get these days, the stark business reality is that less than five percent make it to the second year. One of the most common factors that lead to startup failure is related to operational costs; it is expected that these new businesses will initially operate at a loss, which means that entrepreneurs need to find ways to run their companies in streamlined and affordable manners. Here are four ways of doing so:
This method is not for all entrepreneurs, but it is considered to be the most effective for companies that have no choice but to run on a shoestring budget. In essence, bootstrapping your startup means eschewing external capital that may put pressures on the business and keeping expenses to the very minimum. One of the most exemplary bootstrapped companies include Valve, Zoho and even the legendary Apple.
Instead of spending on hardware and IT staff, you can streamline the tech requirements of your business with the assistance of a cloud computing provider. Even if you need considerable processing power, you can always learn to use a platform such as Amazon Web Services and its Elastic Cloud subscription, which allows you to deploy instances of powerful workstations that you can virtually access from any reasonable client.
Enterprise Resource Planning and Accounting
The financial performance of your startup will only be as good as the depth of your planning and accounting procedures. ERP software, like the products offered at MSPartnership, that integrates with accounting functions is essential for the success of new companies that need to achieve certain milestones while monitoring the impact of their daily operations. Budgeting and ledger operations are much easier to handle with the right ERP and accounting package.
Leverage Social Media
Business communications, marketing and public relations can all be conducted on social media platforms these days. Managing social media accounts tends to take up considerable work; however, many tasks can be automated or handled externally through business process outsourcing solutions that are very affordable.
In the end, the fact that many startups do not last long because they run out of operational cash should not dissuade you from pursuing your entrepreneurial dreams. The key is to make your business agile and affordable with the methods listed herein.