Starting a new business is exhilarating, but it is also an incredibly expensive task. There’s a lot that you need to pay for when starting a new business.
New business costs soon mount up, and while there are many start-up financing options, you also need to have some savings behind you before you begin.
This approach will ensure that you have money to fall back on and don’t have to rely on potentially costly financing solutions for every aspect of your new business.
With as many as one in ten UK residents having no savings at all, it’s clear that many individuals might not be prepared for starting a business or any other unexpected costs they might encounter.
Saving might seem challenging, but it’s often easier than you might think. With a little effort, you could potentially save hundreds of pounds on your personal expenses and improve your spending habits.
If you’re looking to start a new business in the future and don’t have enough savings to ensure that you’re comfortable, then keep reading.
We’ve put together a useful guide to saving and making your money go further as a prospective business owner.
The first step in improving your savings is to optimise your personal finances. That means reviewing your personal spending and then working out how you can reduce it or combine costs to save money. While you might think that some expenses, such as media and your phone, are essential, there are ways to save money on these costs. In some cases, you could reduce your monthly spending by hundreds of pounds simply by taking the time to review your spending and working out if you can cancel some unused subscriptions or reduce a particular bill.
As part of your drive to improve your personal finances and allow yourself more money that can be spent on your business ideas, you should set yourself a budget. You can break your budget down into weekly, monthly or even daily increments so that you can have full visibility over your personal spending. This approach will not only help you to reduce your spending but also prepare you for setting budgets and managing your business’s finances once you set it up. Setting a budget and sticking to it might seem difficult, but there are many digital tools out there to save you time and allow you to manage your personal spending more effectively. Try a selection of options to figure out which approach works best for you and helps you to achieve your saving goals.
Working multiple jobs and pinching every penny can damage your mental and physical wellbeing, which isn’t ideal if you want to start a new business. Instead, it might be a better idea if you tried to find small side-hustles that don’t take a lot of time, but can still help you to earn some extra cash. For example, the mobile network Lebara offers a refer a friend program that allows users to earn to cash from home easily. All you have to do is refer a friend, and you could earn cash, as well as getting your friend a great deal on their network coverage. Find out more about the Refer and Earn program at https://mobile.lebara.com/gb/en/how-to-refer-and-earn. Other solutions include taking paid surveys, doing admin tasks online for cash and more. There are many ways to quickly earn money from the comfort of your home, but check that they are legitimate before you invest your valuable time in them.
A simple tip, but still an effective one, is to send money directly to your savings account so you’re not tempted to spend it by accident. You can set up a direct transfer to send your money automatically as soon as you get paid so that you can’t even see it. This will help you to reduce the temptation to dip into your savings, as you won’t be able to see them in your current account. It will also ensure that you put your money into your savings vehicles as soon as possible, meaning that they can earn more interest than they would if they sat in your current account for several weeks.
Putting your money into a savings account so you can’t spend it isn’t enough. It would help if you also found a great rate that will allow your money to start working for you. Compare the savings accounts on the market to find the best rate possible, and consider getting multiple savings accounts to make the most of your money. Don’t be afraid to change to a new bank- you could find that you get a better rate and even other incentives when you switch. Check out the options available to find the right one for you, and if you’re taking some time to save money for your new business, then review your options each year. Interest rates and savings deals change each year, so you should review the savings vehicles available on the market to find the best ones every year. It might take time to switch to a new account or bank, but it will be worth it when you’ve earned additional interest on your savings.
There are many get-rich-quick schemes out there, ranging from tantalising investment opportunities to sales opportunities that could allow you to be your own boss. However, many of these schemes turn out to be pyramid schemes, which can lead you to lose your initial investment and more. As such, if you hear about a potentially lucrative scheme, you should research it thoroughly to make sure that it’s legitimate. If you have to pay large fees upfront, then be wary and try to explore a safer opportunity to earn some extra cash.
Creating a financial cushion can help you to get your new business off to a great start. These tips should help you to save money and prepare to launch your exciting new enterprise.