How much money is your startup wasting? A lot of budding business owners make a decision or two that depletes startup funds quickly.
To stretch every dollar to the max, startup duo Joan Barrett and Kari DePhillips talk about areas where they lost a few bucks when they launched their digital public relations firm, The Content Factory.
Take a look at a few spots where your startup could be losing money:
1. Office space
When The Content Factory opened, Barrett says they shopped around for a reasonably priced office space and decided to rent a little spot in Pittsburgh.
“Originally, we wanted an office space to work in and to host meetings at,” she says. “We found a fairly inexpensive spot, but we quickly realized that even cheap rent wasn’t worth it.”
The co-founders decided to work from home and get together for coffee or happy hour to talk business when needed.
“We still get that face-to-face time, but we couldn’t see wasting money on office space when we could work from our kitchen table,” she says. “It’s one of the best decisions we made early on.”
Barrett realizes that not every business has the flexibility that her business has, but if office space is required, she suggests shared office spaces. Places like The Beauty Shoppe offer shared space for $250 a month.
2. Hiring unqualified people
If you hire the wrong people, you’ll spend a lot of time and energy helping them through the process and fixing their work, Barrett says.
While many startups want to pinch pennies when it comes to salaries, it’s one area where Barrett says short-term savings can add up to long-term losses.
“It takes time to find the right person for your company,” she says. “But it’s not worth rushing through the process. If you have to devote a lot of time to your new employee, you’re losing client time.”
3. Not charging what you’re worth
“As a startup, we took on any client we could to get experience,” Barrett recalls. While every startup goes through this phase initially, Barrett says it’s important not to let it continue for a long period of time.
“If clients aren’t paying you what you’re worth, you’ll lose money. It’s that simple,” she says. “Plus, a company that can’t afford your services could suggest bigger problems within the company. We’ve realized it’s best to walk away from this situation and find a company that understands the value of your product or service.”
While it took The Content Factory some time to build its staff and customer base, the company has expanded from two friends to a staff of five. While the company is growing, Barrett and Dephillips talk about finances once or twice a week to make sure the company isn’t wasting a dime.
“We keep meticulous records and track every dollar to ensure our business continues to grow,” Barrett says. “Even when the business is ten years old, I know we’ll continue to talk finances frequently to keep the business performing at its optimum level.”
Barrett says reviewing the company’s finances on a regular basis will help spot problems, which can curtail big losses in the future and keep your business on the path for success.