5 Tips for Saving on Startup Costs

When I first launched my Etsy shop of money planners, I made the major mistake of thinking that people would buy actual, spiral-bound copies of my planners. I spent over $200 designing and ordering them from a printing company, only to watch as they sat in my closet for months.

 

Meanwhile, the only products that were selling for my shop were the digital ones – the ones that had cost me virtually nothing to create, other than my own time.

 

I had made the classic newbie mistakes of failing to first test the waters, assuming what my customers wanted, and splurging on startup cost before even registering my first sale.

 

Lesson learned: I now focus exclusively on digital products, which not only saves me money, but also time – automatic digital downloads mean that I can play with my kids, or read a book, while my products are delivered to customers.

5 Tips for Saving on Startup Costs (and streamlining your own finances along the way)

1. Before you launch anything, get your own finances under control.

It’s hard to devote yourself to building any new venture when you’re still struggling under the weight of credit card debt or aren’t sure how much is socked away in your emergency fund. So first, give yourself a money check-up.

 

Use a free online tool like Mint.com to take a closer look at your budget. Once your finances are in order, it’s easy to focus on the fun part – earning more.

 

 

2. Stay organized with paperwork.

Once you’re officially in business and bringing in cash, you can also deduct eligible businesses expenses at tax time – so you’ll want to be sure to keep a record of all your spending along with receipts. Try Intuit for Small Business to keep you organized. Use Outright (we now use Quickbooks for Small Business) to save 50%.

 

(Just remember, the IRS carefully distinguishes between hobbies and businesses. In order to deduct expenses, you must intend to make a profit and reasonably expect to do so, and not just be pursuing a hobby. Take any questions to a qualified tax professional!)

 

 

3. Take advantage of your friends.

Only in the nicest of ways, of course, and you’ll want to pay them back with offers of free babysitting, coffee dates, and lots of appreciation. But if you have a friend who’s a skilled graphic designer, lawyer, or marketer, their abilities might come in handy.

 

Even a half-hour of advice from them over dinner could save you a lot of trouble and point you in the right direction. Bartering is another option – you can trade your own skills with a talented friend who is in need of them.

 

 

4. Use what already exists.

There’s no need to invent the wheel – or an ecommerce platform – when plenty of great ones already exist. Fiverr, Etsy*, Upwork, and Freelancer are just a few of the useful websites that let you set up your own shop in a matter of minutes. Picking the right one for you depends on whether you’re selling handmade goods, services, or professional skills.

 

While you might eventually want to have your own professional website and related marketing material, those expensive investments can often wait until you start bringing in money. That way, you can test the waters and incorporate any tweaks to your product.

 

5.  Focus on free marketing.

Paying for publicity can be as pricey as buying diamonds. Instead of hiring a publicist or buying ad spots, look for free publicity in the form of getting featured on your favorite blog, leveraging your existing social media accounts, and even pitching magazine editors. Sharing your new business with your own Facebook friends can also lead to new connections and ideas.

 

That way, your side-business will be sure to help, and not hurt, your bottom line.

Which of these cost-saving tips are you going to implement in your business? Or maybe you’ve made your own newbie mistakes in a start-up? Allow us to learn from the wisdom of your experience and share with us in the comments!

 

 

Kimberly Palmer

Kimberly Palmer is the author of the new book, “The Economy of You: Discover Your Inner Entrepreneur and Recession-Proof Your Life,” and senior money editor for U.S. News & World Report, where she writes the popular Alpha Consumer blog. In addition, she is the creator of Palmer’s Planners, her own line of digital financial guides and money organizers for major life events and goals.

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4 Comments

  1. Ann Shirley

    These are all really great tips. I’m a big fan of Mint.com myself. It definitely helps you to stay on top of your budget and to better manage your finances. Organizing paperwork is also extremely important.

    Reply
    • Megan Barnes

      Hi Ann. So glad this post was useful to you. I think I may need to mosey over the Mint.com get MY finances in order 🙂 It really is the simple stuff that makes the difference. Thanks for sharing!

      Reply
  2. Bola

    Kim,

    Love how you broke things down into five easily digested nuggets. It’s a given that we would make mistakes when we start out in business – we live and learn right? Abiding by Kim’s 5 rules will make those mistakes a lot less expensive!

    Reply
    • Megan Barnes

      Thanks for sharing, Bola! I totally agree – Kimberly beautifully boils down the startup process, raising simple but crucial keys to not overspending or spending in the wrong places at the outset.

      Reply

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