Companies are now trying to reduce costs and keep employees happy even more than usual.
When it comes to limited budgets, startups often have initial capital issues – so this topic is quite relatable.
If you are as a startup at the beginning of your financial journey, we have put together a few tips to help you do more with a lower budget.
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Startup tip # 1: Motivate your employees and pay for them
Employees are at the root of any business, big or small, and keeping them happy is the only recipe for long-term success.
But keeping employees happy, especially when they are highly talented, can be costly.
Startups also know this, as they still compete with large companies for talent in the market.
How do startups keep employees without having to rob a bank?
You could offer employees coverage for various expenses, such as: gym memberships, workplace benefits, parking, commuting expenses, or health care expenses.
In this case, your company’s spending will be lower and your employees will be happier.
Some startups even offer benefit of free of charge mental help support.
This platform that helps people to reduce anxiety, improve sleep, and nurture their relationships through self-guided programmes; plus access to in-person or virtual talking therapies through HelloSelf, Sanctus and Spill.
Read: Who invented school?
Startup Tip # 2: Outsource before you hire someone
Unless you have a lot of money from investors that you have to spend by the end of the year, hiring new people is not always the best solution.
Unlike a large established corporation, startups usually have few resources available, but need much more than large companies.
Outsourcing may sound like a lot of money, but for most startups, this is often the only way to get the expertise they need.
Even the best of the best teams do not have all the wisdom of the world.
Delegating a part of the business where we don’t feel at home can help a startup focus on what they do best instead of wasting time on various other tasks.
Of course, some processes are best done directly in the company.
But here are a few processes to outsource if you have a resource problem and are all overwhelmed with work:
- Recruitment of new employees
- Manual work with data
- Digital marketing
- Customer support
Startup Tip # 3: Attract and keep your talents
According to JPMorgan & Chase , COVID-19 had a much greater impact on the business cycle than the recession in 2009.
The labor market is overwhelmed with talent due to massive redundancies and many companies have had to cut wages for employees who remain in the company.
Having a senior marketing manager working for junior money may seem like a great idea at first, but it doesn’t really lead to his satisfaction.
It is publicly known and clear that people do their best if they are adequately compensated – but how do you do it while keeping your costs low?
Startups are not known for paying enormous wages, but for being able to attract and retain talent on a small budget.
Their secret lies in employee options.
Employee options usually involve a number of shares that employees can purchase at a strike price that is well below its value.
Options are granted to employees or gradually acquired over a period of four years, with a waiting period of one year in employment.
So if an employee leaves the company during the first year, he loses the right to shares.
This helps reduce employee turnover in the startup.
In this case, options are a great tool to offer value and not go bankrupt.
By offering employees the opportunity to be an investor in the company they work for, you also motivate them to perform better.
Startup tip # 4: Encourage work from home
One pandemic was enough to make companies realize that working from home isn’t really that bad.
Until then, it was unimaginable that there would be an executive team where every single member worked from the comfort of their home – a concept only for idealistic startups.
And how they were wrong…
When employees have the opportunity to work from home, they are happier, more productive, save time to commute and feel very confident.
Companies that offer the opportunity to work from home will save money on the operation of the office, as some of their employees will gladly use this opportunity.
It also means lower costs for food, coffee, cleaning, heating… and many more.
In addition to these obvious benefits, working from home gives you more options when choosing people.
Why should we limit ourselves to one city when we have the whole world at our fingertips?
Startup Tip # 5: Be smart with business travel expenses
The bigger your company, the harder it is to find out if all the spending-generating activities also generate a profit.
You can get a dedicated team to control and manage your expenses, but remember Tip # 2 – think carefully about hiring new people.
Instead, you can use services such as Bolt Business or another cost reducing option.
This type of sign up ride business, will help you to clearly manage your employees’ business travel expenses:
- You will get a clear overview of your employees’ work expenses
- Get rid of unnecessary paperwork and bills
- You set limits for individual teams and their members and you can monitor them on an ongoing basis.