Let’s face it, if you’re an entrepreneur and you’re just getting started with your very first company you probably don’t have a ton of money to burn. That’s okay though because frankly it puts you in the same company as quite a few different multimillionaires who started companies on a shoestring and pinched pennies for quite a while before the big bucks started rolling in. This blog is based on a lot of the things that they did and will help guide you to do the same during your vital startup period. So if you’re ready, grab a pen and paper (or whatever newfangled device you care to use) take some notes and let’s get started.
Rick Cesari, founder of Cesari Direct in Seattle, Washington, was big on using his credit card points to buy gifts for his best performing employees. Today he still uses one card, an Alaska Airlines Visa Signature card, and charges around $200,000 on it every year, heaping the rewards on his top employees.
As a $100 million provider of entertainment and travel services, Brett Reizen will tell you that he didn’t buy furniture for his business for the first six years, something that helped him to save quite a bit of money and reduce his upfront cash needs substantially. He found used office furniture on sites like Craigslist and got by for quite some time with nothing really fancy but definitely sufficient.
This next bit of advice will not only save you money but also is good for the planet. When his online garden supply business was first starting founder Nate Lipton was only spending $300 a month on shipping supplies even though, within nine months, his company,Growers House had skyrocketed to $2 million in revenue. What he did instead was, every time a shipment came in, he and his people used the same boxes that it arrived in to turn around and send out orders to their customers. If you are keen on doing something similar keep in mind that the USPS also offers free boxes and envelopes and you can also find tons of free use boxes on websites like Craigslist.
When RetroFitness founder Eric Casaburi began to sell his health club franchises he used an extra room in one of his existing health clubs to do it rather than spending money on a new office, a move that saved him over $10,000 in rent and also was a great fit for the image he was going for with his startup. Today there are co-working spaces all over the United States that allow startups to have access to the normal necessities that you would need an office like printers and so forth but at substantially reduced costs.
Sky Zone Indoor Trampoline Parks founder Jeff Platt had a novel way to cut employee costs; he trained his people to be able to handle multiple roles, saving him over 5% on the payroll. Eric Casaburi from RetroFitness did the same thing. Both saved big bucks by taking one employee and turning them into people that could handle multiple tasks and roles, something that practically any startup can do and obviously something that’s highly recommended.
Another excellent idea that these startup founders shared with us is that they did a lot of their own market research rather than hiring it out to research companies. For example, Casaburi would actually drive to a location where he was considering putting in one of his health clubs and literally count the cars coming in and out as well as the people. This automobile and foot traffic gave him the information he needed to find out if a location would have enough activity to support one of his gyms.
The simple fact is that, as a startup, one of your most vital tasks is to save money at every single turn so that, if you have a setback or a slowdown, you won’t have spent all the money that you need to survive either one. The ideas and examples that we presented here today can be used by any entrepreneur who’s keen on making sure that his new business prospers. We hope you enjoyed it and that you found some useful information here today and we invite you to come back and visit us again soon for more of the same. See you then.