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Old 20th October 2010, 04:50 PM   #1
AngelBiz
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Default How To Reduce Startup Expenses When Launching A Business

Most people who are launching a business underestimate the time, money and effort required in the initial stage. They end up spending more time and money than they had initially planned. While they are working hard to put everything in order to start the business on-time; the bills continue to pile up and it comes as a shock when they examine the total expense incurred before the money has even started coming in.

There are good reasons to reduce your start-up cost. The less money you spend before you open your business, the more money you will have for advertising and promotion; which is crucial in the early stage. Besides, it will allow you to set more money aside for working capital; which is particularly important for first few months.

Read more - http://www.angelbusinessadvisors.com...ng-a-business/

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Old 20th October 2010, 08:44 PM   #2
raydog
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Biggest mistake I see startups make when it comes to this issue is not negotiating hard enough when it comes to their lease. Especially now, landlords are very flexible. I've recently seen tenants secure not only lower rents, but rent deferrals during store up-fit and even landlord contributions to upfit costs. If the going does get tough, don't be shy about asking your landlord for a rent reduction. Better for him to get a lower rent than carrying an empty store.

Even better yet, try to find a way to start your business without a store front. Rent's going to be your largest expense.

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Old 26th October 2010, 11:39 AM   #3
Candice Robins
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If you can start your business online without a storefront it definitely reduces costs. That generally means online, which means you can test the market: if you want to sell widgets that solve a common problem, you can run PPC to find people that have that problem. If they don't buy, you need to rethink the whole business. You can achieve this with a single web page, a few hours to set up a targeted PPC campaign, and obviously the ~$1000 or so you'll need to pump into PPC to get statistically significant data. Hypothetically you could do this before the widget is even produced, just show the price and a buy-now button, then link it to a page that says "this widget will be available shortly, please join our mailing list (link)." That might annoy the few people who try to buy, but knowing there's demand at the price you set is invaluable.

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Old 27th October 2010, 10:22 PM   #4
AngelBiz
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Quote:
Originally Posted by Candice Robins View Post
If you can start your business online without a storefront it definitely reduces costs. That generally means online, which means you can test the market: if you want to sell widgets that solve a common problem, you can run PPC to find people that have that problem. If they don't buy, you need to rethink the whole business. You can achieve this with a single web page, a few hours to set up a targeted PPC campaign, and obviously the ~$1000 or so you'll need to pump into PPC to get statistically significant data. Hypothetically you could do this before the widget is even produced, just show the price and a buy-now button, then link it to a page that says "this widget will be available shortly, please join our mailing list (link)." That might annoy the few people who try to buy, but knowing there's demand at the price you set is invaluable.
Candice - very good points. Definitely worth testing the market demand before spending ton of money.

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Old 27th October 2010, 10:24 PM   #5
AngelBiz
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Quote:
Originally Posted by raydog View Post
Biggest mistake I see startups make when it comes to this issue is not negotiating hard enough when it comes to their lease. Especially now, landlords are very flexible. I've recently seen tenants secure not only lower rents, but rent deferrals during store up-fit and even landlord contributions to upfit costs. If the going does get tough, don't be shy about asking your landlord for a rent reduction. Better for him to get a lower rent than carrying an empty store.

Even better yet, try to find a way to start your business without a store front. Rent's going to be your largest expense.
You are right. I know several of business colleagues who did just that and got the landlord agreed to price reduction in exchange for extending the lease duration.

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Old 28th October 2010, 01:45 AM   #6
robert24
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The article is good!! Startup expenses can be controlled by outsourcing some non strategic functions so that time and cost for setting up a full fledged deptt for the same can be controlled.

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Old 28th October 2010, 06:38 AM   #7
howtofranchiseg
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Thank you for giving insight on this issue. Like thoughts from all of you. Thanx.

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