Top 10 Ways To Save Money When Starting Up
Jason Calacanis rose to fame when he sold his company Weblogs to America Online in 2005 for millions of dollars. His newest venture is Mahalo.com, a “human powered search engine” that is competing against Google.
Jason also writes a popular blog on which he recently shared his top 17 ways to save money when starting a business.
His top 10 suggestions were:
Buy Macintosh computers, save money on an IT department
Buy second monitors for everyone, they will save at least 30 minutes a day, which is 100 hours a year… which is at least $2,000 a year…. which is $6,000 over three years. A second monitor cost $300-500 depending on which one you get. That means you’re getting 10-20x return on your investment… and you’ve got a happy team member.
Buy everyone lunch four days a week and establish a no-meetings policy. Going out for food or ording in takes at least 20-60 minutes more than walking up to the buffet and eating. If you do meetings over lunch you also save that time. So, 30 minutes a day across say four days a week is two hours a week… which is 100 hours a year. You get the idea.
Buy cheap tables and expensive chairs. Tables are a complete rip off. We buy stainless steel restaurant tables that are $100 and $600 Areon chairs. Total cost per workstation? $700. Compare that to buying a $500-$1,500 cube/designer workstation. The chair is the only thing that matters… invest in it.
Don’t buy a phone system. No one will use it. No one at Mahalo has a desk phone except the admin folks. Everyone else is on IRC, chat, and their cell phone. Everyone has a cell phone, folks would rather get calls on it, and 99% of communication is NOT on the phone. Savings? At least $500 a year per person… 50 people over three years? $75-100k
Rent out your extra space. Many folks have extra space in their office. If you rent 5-10 desks for $500 each you can cut your burn $2,500 to $5,000 a month, or $30-60,000 a year. That’s big money.
Outsource accounting and HR—such a no brainer.
Don’t buy everyone Microsoft Office–it’s too much money. Put Office on three or four common computers and use Google Docs.
Use Google hosted email. $50 or free per user…. how can you beat that?!?! Why screw with an exchange server!?!?
Buy your hardest working folks computers for home. If you have folks who are willing to work an extra hour a day a week you should get them a computer for home. Once you get to three hours of work a week from home you’re at 150 hours a year and that’s a no brainer. Invest in equipment *if* the person is a workaholic.
What are your suggestions for saving money when starting a business?
Evan CarmichaelYoungEntrepreneur.com Blog Manager
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Some other tips I have used:
- Develop a collaborating intranet for free using Google Sites, in less than 2 hours of setting up you can have a pretty decent place to share docs etc … and it’s FREE
- Think twice before buying a new web service. Ask yourself and other team if you really need that service, will it actually add to your bottom line?
- Open source softwares can be a great way to save $$: A company can run very well using Open Office. Photoshop is a total rip off for non-designers. if you only need to resize pictures and make small touch up simply use the powerful and free GIMP.
Happy Saving !
Great new perspective on managing money. When paying for services or new equipment it easy to only focus on, “How much is this going to set me back.” The less obvious, “How much will I save because I met a certain need,” is a powerful perspective to think from.
In my opinion, time is more valuable than money. Money comes and goes, but time you never get back. I like how this advice makes the point of managing your time properly (no meetings policy; buy your hardest working employees home computers), and how that converts to a certain dollar amount.
This is all some very great advice in areas that I would have never thought in. The point that I want to take out of this is that you should invest in things that matter so that you can save yourself time and money in the long run.
Great ideas and thanks for sharing. Now I know there are many alternatives out there for a new business. You guys rox!!
This article is really awesome! Yes, I agree with everything said. Now, from a VIRTUAL/E-Business perspective, then what can WE do to save money?
Here are a few quick tips:
1. Time Block, Time Block, Time Block. All of THE MOST
successful folks are doing this. If you don’t know what
this is, google it and implement immediately. This will
save you time, sanity and help you exponentially grow
your productivity and profits.
2. Outsource market research to elance. Seriously, it’s
never failed me and I’m way to busy to be spending hours
upons hours researching the market.
3. Skype. Why wouldn’t you? I make international calls every
week - Totally 100% FREE. Plus, the sound is much
clearer. This should save you hundreds (or in my case,
thousands) of dollars each year in long distance phone
calls.
4.
[…] According to YoungEntrepreneur.com on saving money for start-up business, their top advice is and I quote them “ Buy Macintosh computers, save money on an IT department.” […]