Strategically Cut Costs for Your Start-Up

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Being an entrepreneur or starting your own small business can be a risky endeavour. The feelings of stability and security often felt when working for an established company, evaporate. Big budgets disappear and all of a sudden you are trying to start a business on a shoestring budget. However, in pursuit of dreams, it is easy to forego the perks of an established company.

Yet, sometimes start-ups not only forego the perks, but compromise on costs across the business. Let’s face it – frugalness is often a necessity in the early days and cutting corners is part of the game. Start-ups are often treading water to stay afloat and can only do that by keeping costs low where they can.

However, there are certain costs you shouldn’t skimp on. Although the upfront cost may seem like an immediate burden, many costs are actually investments. It’s important to identify costs that you should not compromise on as an entrepreneur or start-up owner.

Staffing and Wages

Bringing new team members on board for a start-up is a big step. Hiring employees can be an overwhelming cost. But good employees can help grow your business. They are not just a cost, they are an investment. It is an investment in new skillsets, ideas, and productivity. In order to get the best out of your investment with employees, you need to pay them well. If their wages are too low, it sends them a message that you don’t really value them. In turn, this can have a negative impact. Low wages may cause employees to become unproductive, disenchanted or leave due to wage dissatisfaction. Fair compensation is imperative, even for start-ups. Quality employees can create quality for your business and they should be paid accordingly.


In the beginning your business may start small, but it should have systems in place that can adapt for quick growth. It is wise to spend money and invest in good IT platforms for your business. When orders are infrequent and inventory is small, it is easy to do stock taking in a simplistic manner. Writing it down on paper or logging it into an Excel sheet is all you think you may need. However, as a company expands, stock taking becomes a bigger task and inventory turns over at a quicker rate. Having inventory software in place that is scalable, allows your budding company to cope with growth and larger stock taking demands.

Additionally, customer facing technology, such as the website, should provide a professional image. Often, customers gather their first impressions of a company from a web page. Having a high-quality site with professional imagery and content will help build a good impression and reputation. Low-cost website options will be apparent to your customers and can make them question your brand.


In order to get your brand out there and known, you need to invest in marketing and advertising strategies. Using word-of-mouth marketing can be inexpensive and can bring a few customers through the door. However, it is not nearly as impactful as professional grade methods.

Understandably, cutting costs is necessary for a start-up business without much initial capital. However, it’s just important to strategically cut costs and invest money in to essential parts of the business.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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