In the ever-evolving digital realm, launching a business from scratch poses formidable hurdles, especially in today’s volatile financial climate.
Navigating this journey demands not just dedication and sweat equity, but also astute financial acumen. Reflecting on my own entrepreneurial voyage, I’ve gleaned invaluable lessons on the paramount significance of adopting a judicious, cost-conscious mindset right from the outset.
This week, our experts share insights garnered from grappling with financial hurdles while laying the foundation for my company. From navigating shoestring budgets to maximising resources, here are key lessons and savvy cost-saving strategies to fortify your entrepreneurial journey.
Let’s Talk.
Discover more Let’s Talk Business episodes
Contribute to Dynamic Business
Arjun Paliwal, Founder and Head of Research at InvestorKit
“As a Founder, I have learnt many valuable lessons building InvestorKit, which has grown to be consistently awarded as Australia’s best buyer’s agency.
“Here’s my top tips:
- Nail the tools: It’s easy to believe you need every tool to solve your problems and kick goals. However, as your business evolves, less is best to solve onboarding and upskilling challenges for the team. A quarterly expense and operation review is a great way to regularly evaluate and streamline success.
- Invest in marketing: When cost-slashing it is easy to remove a major function, such as marketing. However, awareness and engagement with your brand is the secret to growth. Invest in your future early on.
- Know your worth: To attract new business it’s tempting to charge less. The price should reflect the value and expertise your business offers, not your stage of growth. By charging the right price, you can invest in business growth with a sustainable revenue model.
- Hire sustainably: I have always believed in paying top talent top dollar. It is important to nail a sustainable remuneration model in early stages to attract, and retain, the right people. This can help avoid future costly restructures.”
Jim Cocks, Business Coach, Author of Build Excite Ignite
“Shiny new thing syndrome is so prevalent in the startup space. Business cards, fancy websites, paid advertising, branding and logos can all come once you have a tested and profitable idea. Clear the clutter to avoid startup overwhelm and focus purely on what drives a business the most, sales. You only need to stay one week ahead of your first paying client and to close your first sale all you need is a great conversation with the right person and a solution to the problem they believe they have. Once they commit to purchase, that’s when you can start to build. And when someone is paying you, you know you’ll have the motivation to show up 150% and get things done to deliver.”
Doriena Parsons, National Head of Strategic Communications & Marketing at Moore Australia
“Investing in a well rounded marketing strategy is not only an excellent way to drive potential business results, it can be an effective way to reduce costs.
“We see many entrepreneurs focus on a purely social media centred marketing strategy, omitting important research. These startups often run out of cash before seeing tangible benefits from their marketing spend.
“Although social media marketing strategies can be highly effective when planned well, they can be expensive, and are certainly not always suitable to all audiences, products or services.
“For your fledgling business, consider carefully what your marketing goals are, where your target audience(s) get their information, and subsequently, which channels are appropriate for your product or service. Digital marketing should always be considered as part of an integrated approach to marketing, business development and overall business strategy. By spreading your marketing spend across multiple, but relevant channels, you can reduce the risk of overspending on non-performing campaigns or putting all your eggs in one basket.”
Mollie Eckersley, Head of Operations ANZ at BrightHR
“It often feels like the odds of survival are stacked against Australian startups. Research has shown us that one in three startups fail in year one, half in year two, and three out of four startups fail by their fifth year.
“One of the key challenges for startups is setting themselves up for long-term survival and success without overextending their finances. Startup founders end up wearing multiple hats to keep costs low, and as the business grows this becomes completely unmanageable. Things will inevitably start slipping through the cracks and expensive blunders happen.
“The best way to strike that balance and keep risks low is to invest in the right tools from the outset, so you can start your operations on the right foot. Software tools are often the most cost-effective route. End-to-end software can take the admin load off your shoulders and free up your time and money to focus on growing your business. Software investments that streamline and simplify operations can mean the difference between a startup surviving and succeeding.”
Chris Dahl, Co-CEO at Pin Payments
“Knowing where to attribute funds is vital as a startup, given you are often operating on lean budgets and tight timeframes. A ‘startup secret’ when it comes to online payments, is to thoroughly understand the fees your business pays on each transaction. Many small businesses are uninformed about transaction costs, when choosing a payment provider, and end up paying extortionate fees due to a lack of awareness. Compare fees and look for transparent pricing structures that suit your sales volume and preferred payment methods, and make sure you understand the interchange fees, scheme fees and acquiring fees. Understanding the different components that make up transaction fees is integral for your startup, in order to make a choice which suits your business as you grow and scale.”
Andrii Bezruchko, CEO and Founder at Newxel
“The known fact is that the average failure rate for new startups is currently 90%. Such high startup failure rates are due to various reasons, one of the most significant being cash flow problems. I once witnessed this with one of our clients – a promising SaaS platform for the entertainment industry. They had a considerable market fit and raised $10M, and we helped them build a strong developer team inspired by the product. However, one day, they informed us that they had run out of cash and faced financial problems. Therefore, I advise any founder to focus on and strictly control cash flow.
“Firstly, research the options for cost-effective locations and operations for your business. Taxes, business operation costs, office rent, and team salaries may differ significantly across states and countries. Usually, startups may not need in-house financial, legal, or HR departments, and outsourcing proves to be more cost-efficient. There are also options to develop your R&D center with top-notch talent in developing countries, which would save your budget immensely.
“Secondly, focus on cost optimization and efficiency improvements in ongoing operations. Regularly review all the company processes and analyze how they impact your financial health. Timely return on investment measurements may prevent you from merely “surviving” and instead enhance your further growth.”
Olivia Jenkins, Business & Marketing Consultant at Olivia Jenkins Co
“In the early stages of launching a startup, mastering the art of cost management is essential for survival. Every dollar saved is a dollar invested back into the business’s growth. To navigate the treacherous waters of limited resources, savvy entrepreneurs must adopt a frugal mindset and implement strategic cost-cutting measures to stay afloat.
“One of the most effective strategies is to embrace the owner-operator role wholeheartedly. By taking on multiple responsibilities, entrepreneurs can minimise overhead costs associated with hiring additional staff. However, there comes a point where time becomes the most precious commodity. When stretched to the limit, outsourcing non-core functions becomes imperative. Begin by delegating low-revenue-generating or administrative tasks to free up valuable time for revenue-focused activities.
“Furthermore, prioritising cost-effective marketing channels, such as social media and content marketing, can significantly reduce advertising expenses while still reaching the target audience. Additionally, negotiating with suppliers for favourable terms and implementing lean inventory management practices can help streamline operations and minimise expenses.
“In essence, the key to startup survival lies in striking a delicate balance between bootstrapping and strategic outsourcing. By judiciously managing costs and prioritising resource allocation, entrepreneurs can position their startups for long-term success and sustainable growth to stand the test of time.”
Hayley Osborne, Founder & Digital Marketing Strategist at Hayley Osborne Consulting
“Digital accessibility at our fingertips allows start-ups to launch, grow, and scale their businesses faster than the small business world has ever seen. With the right tools and education, upskilling to fill knowledge gaps is easy. So many start-ups think they need all the fancy tools and resources to get started, when really, they don’t.
“Listening to marketing and business podcasts and following insightful experts on socials is a great way to upskill. It takes your time but doesn’t require money, and knowledge is power. Researching and accessing apps like AppSumo will ensure you never pay full price for software and programs again and is another great way to save money.
“Giving yourself access to group learning is one of the quickest and fastest way to upskill and learn from the best rather than outsourcing. Membership groups in marketing will give you all the tools and education you need bring in new leads, leading to increased sales and increasing your bottom line to continue to grow. Having access to an instant community of like-minded individuals is one of the most accessible ways to network and learn at the same time. Memberships are a great tool for a minimal investment.”
JP Tucker, Founder of OPTIDAN AI
“JP Tucker, seasoned in navigating the volatile e-commerce landscape, advocates a ‘do more with less’ mantra, especially relevant for startups using platforms like Shopify. His experience suggests a strategic overhaul of operational tools as a critical cost-saving measure.
The first step, Tucker advises, is app rationalization. Review your Shopify apps; many are likely redundant or underused. During economic upswings, certain features might seem indispensable, but downturns necessitate trimming excess functionalities. It’s about identifying what truly drives value and shedding the rest.
Another area Tucker emphasizes is open communication with partners. “Convey your situation to your partners. Ask if they can pause payments or offer a grace period,” he says. In tough times, sustainable partnerships matter more than short-term gains. The key is to be transparent and seek mutual support.
Remember, according to Tucker, “If you don’t ask, you don’t get.” This approach isn’t about compromise; it’s about smart management and maintaining agility. By reducing overheads and fostering cooperative relationships, startups can not only survive but also position themselves for growth when the economy rebounds.”
Aramis Damond, SEO Account Manager at Megantic
“One of the most cost-effective ways to advertise your startup business is by setting up and optimising a Google My Business (GMB) listing.
“It is one of the quickest and easiest ways to allow potential customers to find your business. It allows you to give these potential customers everything they need to know, such as photos of your products or services, opening hours, contact details and where to find you.
“You can set up a GMB profile and store location(s) by heading to https://www.google.com/business/ and following the steps to set up. The more information you can provide Google, the better.
“To keep your GMB listing optimised, make sure to manage and respond to reviews, keep hours and details accurate, and give the user as much information as possible.”
Discover Let’s Talk Business Topics
Keep up to date with our stories on LinkedIn, Twitter, Facebook and Instagram.
