For every one startup that succeeds, there are many others that fail. Most of these failures can be attributed to running out of the necessary funds or cash to continue going on, and mismanagement of funds is a common problem faced by many new startups. While proper budget planning is vital to ensure a product or service is polished and ready for launch, oftentimes a startup fails to consider their budget properly and ends up spending way more than they should have.
While it may be tempting to launch a product or service with all the full range of bells and whistles so it outperforms its competitors and fulfills multiple needs of the market, doing so costs lots of money as each feature or addition escalates the budget needs. Sometimes, a startup launches a product or service with all the features that they thought the market needs or wants, but in the end it turns out this isn’t so. Less is more is a great philosophy to abide by when launching a fresh product or service; build a solid one first with just a few outstanding features so the startup doesn’t overplay their hand and budget. After the launch, the startup can then collect feedback and input from the market to determine what other features would best suit the market’s needs, and then add those to the product or service progressively as the startup grows.
In this day and age of the Internet and mobile services and devices, it is becoming commonplace to work from home, or go remote. Renting office space long term is no longer as important as it used to, especially if they are tech startups or operate in a digital or online space. Going this route greatly reduces costs and is quite viable; a startup’s team can communicate and stay in touch through various means ranging from teleconferencing, to email, to messenger app and video calls. Additionally, there are now many online sites like Hubstaff, Taskworld and Trello that offer team management and collaborative tools that make working remotely even easier to do.
Another alternative that will help lower costs is to shift to rural areas. Instead of being based in major cities where costs are much higher, tech companies and startups are finding that, with the latest innovations in technology and rapid internet penetration, the prospect of running a successful business from a less populated area is becoming more and more a reality. This is especially true for tech startups. Also, another compelling reason for operating in a rural area is the role the startup plays in helping to revitalize and rejuvenate the local community; this creates good buzz and may open up entire new markets for the startup to explore.
The more a startup is able to save on costs and stretch their budget, the more likely it is for the startup to succeed. There’s no need to spend money and resources like the corporate giants in order to compete with them; indeed, for new startups, being wise and frugal with money and funds goes a long way towards achieving success.