Most startups come with bumps in the road, but how you deal with them can make all the difference. If, for example, you’re running low on capital, acting fast can allow you to get back on top and avoid further trouble down the road. So, if you’ve noticed that your bank account is dwindling, now’s the time to make some changes. Here are a few options to consider:
A Change of Location
At one point in time, being in the best part of town was a way in which to improve your sales. Now, though, it’s all about your internet presence. As a result, you can save a significant sum of money by changing your location.
Take, for example, virtual office services. These ingenious platforms offer the illusion of a prominent position in town without the hefty lease. You simply pay for the address and mail forwarding services and work from the comfort of your home. You even get access to meeting rooms whenever you need to meet clients or investors in person.
Cut Costs
If your startup is running low on capital, then it’s time to cut the fat. Think about all those unnecessary costs you can do without. Do you really need to bring in a caterer for workplace lunches? What about the fancy coffee machine with special coffee beans? Even just a few dollars and cents here and there can add up.
It can also help to know that you aren’t the only one facing tough times. Hundreds of thousands of startups launch in the USA every year, and many of them are currently tightening their belts.
Raise Your Rates
Launching a startup can cost quite a bit of money. It can also cost quite a bit more to keep going. The money to cover these costs has to come from somewhere. Though investors are valuable resources, to enjoy long-term success, most of your funding must come from customers.
If you find that you’re barely covering costs, then look at the reasons why. Are you charging your customers enough? Most customers and businesses expect price increases as a result of inflation. If it has been a while since you looked at your pricing structure, then now might be the time to revise it.
Advertise Smart
If you’ve been sinking money into advertising and getting nowhere, then reconsider if you’re marketing your products and services in the right place. Some forms of advertising are better than others.
Facebook, for example, is a platform on which three million businesses actively advertise. Social media advertising is popular as it allows you to target specific groups of people – those more likely to need you. Radio and print advertising, however, is less specific and can be costlier.
Adjust Your Payment Schedule
A common problem that startups face is not receiving timely payments from customers. Now might be an ideal time to look at your payment schedule. Are you allowing too much time for people to pay?
Rather than allowing money to leave faster than it comes in, shorten your payment timeframe. If you currently allow 90 days, then trim it to 30, or even 14. It might take a while for your clients to get used to the change, but it can ultimately improve your cash flow.
Running low on capital as a startup shouldn’t be a reason for you to panic. However, it should be an alarm bell that you need to identify where the leak is. Are you not charging enough? Are your costs too high? Are you not advertising in the right place? Small changes can make significant differences.
