Are you at the point where you are looking for cost cutting tips for startups?
Some phases of the economy demand businesses focus on cutting costs. If you are facing one of these periods in your market, check out these cost cutting tips for startups…
No matter how big or small your company is there are times when you need to take a hard look at cost cutting measures. In fact, all smart CEOs and entrepreneurs should be making a regular evaluation of their spending and revenues. Even when you have a full-time CFO, and great bookkeeper and accounting firm on retainer, and it isn’t your favorite thing to do.
Here’s how to look at your numbers, save wasted dollars, optimize for sustaining your businesses and profitability, even in tougher times.
What is the single one most important thing your startup business is all about?
Before diving into your finances and trying to figure out cost cutting tips for startups, it is imperative that you are focused. The number one startup mistake that even big companies make is cutting the wrong costs, and ultimately doing far more damage to their business and shareholders.
Revisit your mission, vision, and a big goal. Use this as the lens for evaluating every expense and hour spent. Each dollar and minute is either taking you closer or further from the number one thing and the critical milestones on the way there, and achieving them in the right and most efficient order.
Audit Your Finances
What are your real expenses? How much are they? What is your real profit? Where is that really coming from? You need to shift more focus and budget there.
You’ll probably quickly identify items that are not necessary expenses. You can also benefit from an outside consultation and unbiased review which may open your eyes to items you thought were necessary expenses, but which are actually killing your finances.
Also keeping your finances up to date will be critical also if you are looking to raise capital from investors as they will demand your financial model with all type of historicals as well as projections.
Keep in mind that in fundraising storytelling is everything. In this regard for a winning pitch deck to help you here, take a look at the template created by Silicon Valley legend, Peter Thiel (see it here) that I recently covered. Thiel was the first angel investor in Facebook with a $500K check that turned into more than $1 billion in cash.
Remember to unlock the pitch deck template that is being used by founders around the world to raise millions below.
Identify The Musts
When thinking about cost cutting tips for startups, you need to ask yourself what are the most basic absolute musts your business needs to spend money on? There is probably truly very little that needs to be on this list. Be tough, you can always expand later once you are in a better financial position and have the luxury of discretionary spending.
If it is not on the must list, then you must not spend on it. You can’t afford to.
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