Top 10 Ways to Save Money When Starting a Business

How to conserve cash flow, cut costs, and keep your business profitable.

Money Tree

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If you're starting a business, you know that every cent counts. You'll need equipment, office space, and computer software. Employees and suppliers need to be paid. You may be looking for some methods to save on initial spending. Here are a few ways to reduce expenses when starting a business.

Used Equipment 

When starting out, resources such as cash are scarce. There are methods of acquiring the equipment you need to operate at reduced costs.

When considering equipment, examine the used equipment market. Small businesses close for a variety of reasons, leaving you an opportunity to capitalize on their misfortune.

Government auctions are another place to look and are much more convenient than in the past. Government auction sites such as GSA Auctions are host to many used governmental industrial and service items small businesses could use. Generally, they post pictures and video of the items being auctioned so you can view the condition it is in.

Virtualize Your Office

Technology allows you to to not be tethered to one location if your business allows for it. Start your business from your home and use technology to connect to your employees, target audience and customers.

Once you have established your customer base and can spare the cash, you can move your business to an office or commercial building.

Use Bartering

Bartering between business owners and customers is still a useful technique for multiple parties to acquire something they need. This may not be a method you can use upfront unless you have assets you can barter with from other ventures, but once established you might be able to swap services or unused equipment with a similar business in the area that needs it.

Open Source Software

Much of the software a business uses has been recreated by volunteers in the open-source community. Open source refers to the non-proprietary nature of a product. In other words, free or much less expensive than similar commercial software.

Points of sale software, accounting and bookkeeping software and many others are available. Keep in mind when using open source software that there may be limited or no official support. Support can usually be acquired from community forums in the form of other users.

When you are looking to save on initial purchases, known as the initial outlay, open source can help you get started.


If your business is going to be generating products to sell, you are going to need to find suppliers for your materials. Shop around for suppliers. Compare their products with your needs, and compare the pricing to find if it falls in line with your budget.

Once you identify the suppliers you can work with, see if they will establish partnerships with you. They may even be willing to grant you a line of credit after you have dealt with them for a time. Similar to a credit card, a line of credit is the ability to pay at the end of a period for the products or services you have purchased.

Find Discounts

It is usually cheaper to buy in bulk than individually. When you talk to your suppliers, see if they offer discounts for bulk buys. Generally, suppliers are willing to work with and negotiate terms with their customers. If your supplier is not willing to negotiate or offer discounts, you may be able to find one that does.

Don't limit yourself to local suppliers. Using local suppliers is good for the local economy (money is kept in the surrounding economy, increasing your sales opportunity), but you may be able to find suppliers that offer discounts on shipping and bulk that cost less than local suppliers.

Discretionary Expenses

Discretionary expenses are expenses you do not necessarily have to pay at a particular moment. You may not even need the expenses at all. Work through your expenses list and determine the expenses you can reduce or be rid of.


You may not find the talent you need for your business locally. If this is the case, outsourcing is an option. Outsourcing is a method of paying a person or other organization to complete tasks for you.

This can be cheaper than hiring an employee, and established firms will have some talent you can rely on before you begin hiring your own.

Incremental Increases

Start your business small, and establish slowly increasing goals to grow your customer base.

Once you've established your business and are operating well, you may find that you are able to spend a little more. This may be the time for you to address equipment upgrades or new hires. You may also want to look into changes like different products or services, or expanding.

Incremental increases give you an opportunity to measure the effectiveness of each step of the change before investing more capital for the next steps. Smaller steps will also limit the losses should a change not go as planned.

Track Your Cash Flow

Tracking your cash flow can save your business from paying late fees or missing bill payments. As a business owner, you'll hear repeatedly that cash flow is important. Most small businesses that fail do so because they run out of cash.

You might want to consider tracking your cash flow from the first period of operations. Cash pays your expenses before you generate revenues. It also covers unforeseen expenses that crop up.

The statement of cash flows will allow you to follow your cash. You are able to use this statement on a monthly basis as well as annually. All that is needed is your monthly financial data to determine where your business' cash is and if you have enough.