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How lean is your startup?

saving money

Ramesh Sharma is CEO of TPG UK and founder of Tech City News. In this article, he discusses how startups can keep their costs down.

A major challenge facing small business owners is growing their business and keeping costs down.

In the vast majority of cases, small businesses are self-funding.

In other words, the business has been started, maintained and is being evolved on the blood, sweat and tears of YOU, the owner.

Growing your business can be done by acquiring a large investment or loan, working hard to pay it back and, if everything goes well, enjoying a happy retirement.

Or, if the economy stumbles and falters, struggling to get out of debt.

Many small business and startups will attempt to grow and do so debt-free.

The good news is that it is possible but to do so, a startup needs to be lean.

Here’s how to do it:


Call it what you will, if you need more office furniture, you don’t have to go out and buy brand new gear, sinking a year’s profit into a desk.

Clean it, check it for woodworm and then use it.

Paint it or sand it, or varnish it if you need to but office furniture can be repurposed, recycled, reclaimed and upcycled too.

Sweat equity

As a small business owner you will do more than just be a director.

You will clean the loos, take the mail, vacuum the office, do the washing up, do payroll and… the list goes on.

This is known as sweat equity where to save money to plough back into the company, you do all the stuff that needs doing.

As you grow, you can hire more people or outsource stuff.

Budget for everything

It may not be your most favourite thing, spending your evenings pouring over your books and figures in columns but, by keeping a very close eye on how much money is coming in and where it is going, you are being as lean as you possibly can.

This process, for example, allows you to question why you spending £50 a month on tea bags and finding a better, cheaper alternative to financing something that is not giving you a financial return but is important.

Identifying what are major costs – and always looking to reduce them

For many small businesses, there are one or two major costs that seem to suck a lot of lifeblood out of their business.

By understanding what they are and monitoring them, as well as presenting creative solutions without compromising on quality, you will find that cash flow problems ease considerably.