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!
Latest posts by Kimberly Palmer (see all)
- How to Build Your Tribe - February 4, 2014
- 5 Tips for Juggling Your Side Biz with Your Day Job - January 28, 2014
- 5 Tips for Saving on Startup Costs - January 21, 2014