When 90 percent of startups fail, the odds are against you. This disheartening stat leads many to rethink their calling, but it isn’t meant to discourage entrepreneurs from doing what they love. This stark reminder about startup failure serves to encourage you to be smarter about your startup, particularly your finances. Keeping the following cost-effective steps in mind can help you beat the odds and become part of the winning 10 percent.
Think about relocating out of the typical startup zones.
Basing your startup in Silicon Valley gives you some advantages. As the hotbed of tech, it’s where giants like Google, Apple, and Facebook call home. You’ll have access to a huge network of your peers, giving you an opportunity to meet influential people and inspiring minds.
These advantages may not matter once you consider the cons of basing your startup in an over-congested part of the country. You’ll experience some of the highest cost of living in the country, forcing you to live with several roommates just to get by. And those roommates may just be your competitors. You aren’t the only entrepreneur inspired by Silicon Valley. Thousands of tech grads and business owners flood this part of the country every year, making your task of standing out even harder.
According to the New York Times, the rising cost of San Francisco is pushing many investors to consider other parts of the country, signaling the end of Silicon Valley’s reign. These investors are looking towards Illinois, Michigan, Ohio, and other Midwestern states for cheaper, less congested opportunities. You’ll save considerable fees on rent by choosing one of these areas instead.
Have a backup plan for personal emergencies.
The first few years of your startup’s life will be an overwhelming and all-consuming endeavor. With eyes on the business, it’s easy to be caught totally unaware of personal emergencies that have the power to derail your entire life — including your startup. Unfortunately, these things are likely to happen, as necessary repairs, unexpected bills, and minor car accidents are an expensive but normal part of life.
Don’t let these SNAFUs threaten to topple your personal finances. Think about how you’ll cover these emergencies before they happen. With many conventional sources of help not available thanks to your career choice, contacting an online direct lender may be the only way to bail yourself out. Check in with a direct lender like MoneyKey to see how easy and convenient their online cash loans are to secure for personal emergencies. Online direct lenders provide a simple way to borrow cash.
Outsource short term or temporary positions.
You may find need of additional employees very early on in your startup’s life but lack the finances to support these positions. That’s okay. Outsourcing is a cost-effective way to cover these tasks without investing in an employee long term.
Should you need help with blog writing, social media management, or search engine optimization, you can contract a freelancer that can cover these duties. Rather than having an in-house blogger managing your social media, contracting a short term writer can keep your blog relevant and ranking high in search results. Similarly, if you need help organizing and maintaining your bookkeeping, you can outsource a virtual accountant to help you manage your accounting. Once your finances balance, you can hire these freelancers full time or find their full-time replacements.
Running a startup isn’t easy nor is it cheap. When most startups are anticipated to fail, it’s important to take the appropriate steps to make sure you’re not following the same path to failure. Start with these three simple tips, and you’re already ahead of the pack.