Ten Money-Saving Tips for Starting Your Business

1. Business Structure

Incorporation is for businesses with substantial business volume. A start-up can initially operate inexpensively under the owner’s name without any additional formalities. The new business may need a local business registration and license in some jurisdictions.

2. Banking

Banks offer complete business packages with many great services and high fees. A start-up just needs a simple checking account. If the owner is doing business in his own name, a personal account used for the business is usually enough.

3. Financing

All businesses need financing to bridge the gap between incurring expenses to do the work and the customer paying the bill. Banks often charge small businesses high rates and fees for such loans. A prospective owner planning to start up a business may get a better deal if he applies for a loan while still employed or otherwise earning a steady income.

4. Work Space

The focus of a start-up is to generate revenue and minimize costs. Second-hand office furniture is adequate for filing cabinets, desks and shelves, but a good chair increases productivity.

5. Computer

A computer is an essential business tool, but business applications don’t require a lot of power. Free business software can work with all the important file formats. A medium-sized, inexpensive laptop with free office software such as Open Office or Google Apps is adequate for any business start-up.

6. Printer

The initial output requirements for a business include printing, scanning and faxing. Scanning lets a business reduce paper use and clutter while banks and government agencies often still insist on faxing material. An inexpensive multifunction printer, scanner and fax machine will cover these initial needs, eventually to be replaced with single-function units when required. Check out a colour laser printer too. You can print flyers and some other marketing materials inexpensively and in smaller quantities compared to having them done by a printer.

7. Advertising

Effective advertising requires a large budget. Start-up owners can achieve much better results by focusing on direct mail and email distribution to lists generated from their own contacts and networks.

8. Marketing

Start-up owners can save money by using their own computer to generate initial marketing material. They can make the designs look professional by incorporating royalty-free images from low-cost services like 123rf or CanStockPhoto.

9. Bookkeeping

When starting a business, there is comparatively little activity to track. A system of spreadsheets for income, expenses and acquisitions keeps records in an easily-converted format for later input into a full-featured book-keeping or accounting program. There are more and more free or inexpensive online accounting systems out there such as wave accounting.com or zero.com. These systems also allow your accountant/bookkeeper to access your books remotely in order to fix errors or download the information into their tax software. Of course, the best thing to do is to outsource your bookkeeping as you have better things to do.

10. Taxes

In most jurisdictions, business losses from a business carried out in the owner’s name are deductible from other income. It may be advantageous to start the business in the summer or fall so start-up expenses are incurred before the end of the year. The owner can then deduct these against income earned in the first part of the year, especially if the owner was previously an employee and gave up his job when he started the new business. Such tax planning can result in a substantial refund during the first year of running the business, just when the business is likely to need some cash.