Half of new business startups fail within five years, according to the latest available data from the Census Bureau and Bureau of Labor Statistics, as SmallBizTrends.com reports. For online businesses, the failure rate rises to 97 percent, according to WebVantage Technologies founder Gaurav Mahashabde.
Among the common causes underlying this failure rate are insufficient capital ranks, according to business textbook author Dr. Michael Ames. Finding ways to conserve cash by cutting costs is essential to surviving the startup phase. Fortunately, various entrepreneurial tools can help with this.
Streamline Your Staff With Outsourcing
The biggest expense for most businesses is typically payroll. The largest chunk of this goes towards wages and salaries, accounting for 70.3 percent of compensation for private industry employees, according to September 2013 Bureau of Labor Statistics data.
The most direct way to cut this expense is by using outsourcing to minimize the size of your full-time staff. A freeware tool to facilitate this is Google Docs, a cloud-based office suite for virtual collaboration with remote workers. FireCask director Alex Moss provides detailed tips on how to use Google Docs for effective remote workforce management, along with a handy template.
Go Paperless with Payroll Cards
Another simple way to reduce payroll cost is to eliminate paper checks by using payroll cards. Paper checks cost money to print, process, and ship. As Forbes notes, adopting payroll cards can save your company $2.75 per check, according to the American Payroll Association.
Use Electronic Accounting
When it comes to tracking payroll and other expenses, using accounting and tax preparation software can save you money on multiple fronts.
In addition to saving you time on bookkeeping, automating your accounting and taxes helps avoid getting blindsided by expensive cash-flow problems, credit hassles, and tax penalties. The industry standard for small business accounting and tax preparation software is Intuit, maker of QuickBooks and TurboTax.
Lower Your Rent With a Virtual Office
If your business model lends itself to work out from a virtual office rather than rental space, you may cut your costs significantly. Telecommuting saves companies an average of $10,000 per employee a year in real estate costs, according to a Global Workplace Analytics study.
One way to take your office to virtual heights is by using mobile devices to let you and your staff connect to the cloud. To help you secure your virtual office, mobile device manufacturers have been developing tools such as BlackBerry's Balance technology - relies on the BES10 operating system. This solution segregates business work space from personal space so that employees can switch between enterprise and private applications without compromising company data.
Cut IT Costs with Cloud Storage
Another way to cut expenses is by moving your IT infrastructure to the cloud. In order to do this, you will need a good cloud data storage system that provides space, backup, and inter-device syncing. Amazon Cloud Drive, Dropbox, and Google Drive are a few cloud storage options to consider.
How do you cut corners with your startup? What entrepreneurial tools are you using now?