What Can You Do If Your Startup Is Not Profitable for a Period?
Launching your startup is one of the most fulfilling accomplishments in the world. It all started with a single spark of an idea that you have nurtured and turned into a reality. And now, it’s finally in operation. You have worked so hard to get into this stage. Congratulations, you have done well.
However, as we know, businesses, just like life, don’t always go the way we planned. There are bound to be some road bumps ahead. There may even be times when it’s not going to be that profitable. So what do you do then? Don’t worry, that’s precisely the question that we are going to answer in this article.
How to Cut Business Expenses
The first thing that you should do is to cut down your business expenses. List down your needs and costs and organize them according to their priority. Are there items in your list that you can cut off or even trim down? Aside from that, here are more ways where you can minimize your cash outflow as much as possible:
- Take advantage of free services. There are a lot of services and resources that you can tap into online for absolutely free. For instance, instead of spending on a landline phone, why don’t you use online methods to perform your communications alternatively? Instead of paying for a licensed word processor, why not utilize Google Docs instead?
- Go digital. You can also cut significant expenses from paper and ink about the previous tip by going paperless and saving your documents to an online database. Instead of spending money on gas for your business meetings, then why not hold them virtually instead? You’ll be surprised at how much of your business processes can be done digitally.
- Cut down on utility use. Sometimes, simply unplugging office equipment currently not being used or turning off the AC in rooms that are not occupied can already cut the cost of your utility bills. However, this can’t be done alone. It would be best if you had the cooperation of your employees as well.
- Hire less. Speaking of employees, you don’t need to hire a lot of them. Sure, you can’t expand your business alone, but you don’t always need regular employees either. You can outsource your tasks to freelancers instead. This is especially good for occasional and specialized functions that are not part of your daily business processes.
- Buy secondhand. Finally, you don’t always need to buy new office equipment. There is a lot of secondary gear out there that works just as well. Plus points if you can even find a way to borrow them instead.
How to Get Additional Money
We understand, however, that there are times when it’s simply not enough to cut down expenses. That whatever you do, the financial struggles seem to pile up on top of each other. While it can help cut down your outflow, you realize that what you need is a substantial inflow that can get you back on your feet.
Apply for a Loan
There are a lot of personal loans for fair credit that you can apply for online. Other methods can help you get additional money, which we will also list down below. However, getting a loan still proves to be the fastest way to get the cash that you need right now.
Different institutions, both government and non-government, offer financial assistance to small businesses and startups like yours. It might take a while to get approved due to the number of applicants, but getting approved can help you during these challenging times.
Invite a New Investor in
Another way to get the money that you require is to get a new investor on board. You don’t even have to seek an investor elsewhere. Instead, we recommend looking for one within your existing network.
Is there a friend who might be interested? Is there are family members whom you can pitch to? If you opt to go this route, though, make sure you are putting your best foot forward. Prepare a professional pitch. Send the materials in advance. Schedule a meeting. You’re not just pitching another “crazy business idea” of yours during dinner. You’re a CEO and business owner looking for a new partner.
How to Search New Clients
Finally, cutting down your expenses, taking out a loan, and starting a new business partner—are not permanent ways to secure and stabilize your startup. What you need is to increase your profit. What you need are new clients. Here are ways to do so:
- Invest in digital marketing. Expand the reach of your brand by increasing your online presence. Increase the quality of your web content/ Utilize social media. Launch an email marketing campaign. Create landing pages where you can set up infinite sales funnels that don’t just increase your leads but turn them into paying customers.
- Partner up with the members of your community. What’s your niche? What’s your tribe? Is there a social media influencer who would love to feature your product in exchange for certain perks? Is there another small business that you can collaborate with so that you can tap into each other’s existing networks?
- Improve your product or service. Finally, have the courage to look at your product or service objectively. Maybe the reason why it’s not selling is that it hasn’t reached its full potential yet. Ask for feedback and listen. Work on improving what you have to offer. Don’t fall into the depths of mediocrity just because a product is already selling well, but go beyond that and strive to turn those good numbers into great ones.
By keeping the tips we have shared with you in mind, we’re sure that your startup will be able to get back on its feet in no time. Think of your vision. Stick to that goal. And don’t stop hustling!