Here’s a shocking statistic to start your day with. A recent report found that ninety-two percent of startups fail. 92 percent is a massive amount and quite shocking, considering how often we hear about startup success stories. It makes you think that the majoritiy of these stories may not be true. With this figure coming to light it’s clear that running a startup is more akin to winning the lottery rather than mining for gold. Both are rare occurrences, but if you want to dig for gold, you’ve got to buy a pickaxe. If you want to win the lottery, you’re probably looking at making an investment, purchasing a ticket each week. That’s exactly what starting a new business means. It’s pushing your money into an investment that you hope will pay off. However with those odds, you might feel as though you shouldn’t even bother. Why spend time and money setting up your business if it’s just going to fail in a couple of months?
Before you give up on your dream of owning a company, it’s worth highlighting the main reason these startups fail. Usually, it’s because the business owner has over spent. Their eyes have been bigger than their stomachs, and they’ve poured cash into a growing enterprise. But it’s not just startup owners who are guilty of this. Bigger business owners are massively overspending and industry experts believe this needs to stop.
In 2008, the stock market crashed because people were overspending and living on credit. There is evidence to suggest that business owners are now doing the same. They’re borrowing more they can afford to make their company bigger and more competitive. It seems then that that all business owners could do with learning a thing or two about saving money and cutting costs. But where should you start?
Energy And Efficiency
If big business owners are guilty of overspending, it’s probably due to the amount of energy that their company is using on a daily basis. We’re not talking about small amounts over either. Business owners are using massive amounts of energy that they can’t afford. But as well as that, they’re weakening the supply as a whole. The population of the world continues to expand. As it does, more people need energy, electricity, water and gas. But in a way, there is only a finite amount of energy in the world available. Without building more energy plants, we will experience power shortages. In some parts of the world, this has already started to occur. For business owners though the problem isn’t the amount, it’s the cost.
They need to think about ways to cut back and save cash. There are easy ways to save energy in business and make a company green. Businesses can start by considering switching their energy provider. Looking at the market it’s clear some providers are massively overcharging for energy. If you think you’re one of the companies being swindled check out the competition. You might be surprised by just how much you’re overspending.
Then there are the little changes that could have a huge impact. For instance, LED light bulbs should be being used in every office right now. But some business owners are still using halogen and others are using high-powered bulbs. There’s no excuse for this and it will be costing companies a fortune they can’t afford.
But efficiency is about more than how much energy you may or may not be using. Businesses have to think about whether they are wasting other resources as well. Just using a paper resource inefficiently is going to push the costs of a company. Businesses can control costs like this by using companies like Scope Business Imaging. Sometimes it can even be just a matter of buying the right machine. Efficiency levels can be controlled, and businesses will be able to save costs. This brings up the next point of outsourcing.
Outsourcing Is The Solution
Business owners are still shying away from using outsourcing solutions. Meanwhile, the general public are completely misunderstanding the term. Outsourced used to mean putting parts of your business in the hands of a different country, usually abroad. This was to claim the benefits of employment laws and attractive tax schemes. For instance, Puerto Rico offered low tax schemes for businesses that set up there over the past decade.
Now though, it’s likely if you do use an outsourcing company, they’ll be down the street from your office. Or, at the very least in the same city. It’s cheaper to do it this way. You can cut the costs of transportation and delivery. Occasionally, outsourcing can be completed entirely online and it’s still beneficial to business owners. They get the service they need, cutting the cost out of their own business model. For industries like manufacturing where companies can struggle to break even on a weekly basis, the saving is essential.
The Modern Business Model
If entrepreneurs are opening businesses, they need to understand the modern industrial world. These days, it’s not wise nor financially viable to set up business premises. Instead, it’s far cheaper and easier to set up entirely online. You can still deliver to local customers and offer the same services. But again, you’ll be cutting your costs substantially. As well as this, it’s no longer advisable to hire a full-time staff. Most business owners don’t bother doing this anymore. Instead, the majority of their employees are freelancers. This means they won’t have to pay them on a fixed contract which makes the process cheaper. As well as this, they’ll have less responsibility for their employees. In many cases, all the work completed is done from the home of the individual employee. There is no need for a base of offices. Home run companies are fast becoming the future of every industry.
As well as this, entrepreneurs must learn not to try and run before they can even crawl. If your business is opening with a massive debt on your shoulders, it’s already in trouble.
Don’t let the chances of success put you off. If you can figure out how to cut your costs, you still have an excellent shot at running your own company.
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