What is personally chargeable from a startup

Cost reduction in startup companies

Anyone who, as a founder, fulfills the dream of their own company, has to reckon with many a cost factor that has a significant impact on the book. In the first few financial years in particular, the startup has to face a lot of costs, with expenses for various purchases being incurred. Comprehensive financial planning is essential for a successful start in self-employment. But in which areas usually incur the greatest costs and which measures can unnecessary expenses be reduced? What do founders have to pay attention to if cost factors are to be reduced in the long term?

Why do young companies have to struggle particularly often with running costs?

Company founders are generally confronted with a whole range of investment costs. Not only do business premises have to be rented, but the development of effective marketing strategies is also an important issue for startups. In addition, you need your own website and usually a company car. Such cost factors put a heavy strain on the budget, especially in the initial phase. However, these are inevitable costs, so that they can only be reduced in the long term in the form of savings. In addition, the profits are usually fairly clear in the start-up phase, so that founders often have to turn over every penny extra.

In which business areas is the relationship between income and costs particularly important?

The fixed and variable costs can be controlled relatively easily in a pure office operation (e.g. from the IT or finance area). For manufacturing companies, on the other hand, the cost overview can be a real challenge, because the fixed costs also include expenses for suppliers, materials and many other items. In order to keep production costs as low as possible, a comprehensive and precise analysis is essential. The fixed costs in particular often offer a high savings potential that can be cleverly exploited by skilled founders.

Which industries offer great savings potential?

In addition to production, founders should pay close attention to administration, because this often results in extremely high costs - and often completely unnoticed. The energy and material costs can cause particularly high costs. A first measure can be to reduce the paper consumption and the printing costs, whereby the choice of the right device is of great importance in this context. Efficient tools can be associated with expensive acquisition costs, but they quickly recoup the additional costs during operation. The digitization of business documents also offers another savings option. With the help of PDFs & Co., for example, paper consumption can be reduced considerably, which in turn brings significant savings to the startup. Furthermore, it makes sense to take a critical look at the incurred telephone and internet costs, especially if, for example, business trips abroad - e.g. to Russia, China or the USA - are made on a regular basis. In this case, many young entrepreneurs are increasingly opting for the use of US prepaid cards or other country-specific telephone offers, as these offer a clear cost structure and thus ensure good comparability of the various tariffs with one another.

Reducing costs: what startups have to consider

Large savings can of course have a positive effect on the young company - especially in terms of capital. However, they can possibly also affect the quality or productivity of the company. Cost reductions, especially with regard to energy costs, should by no means be at the expense of working conditions. Therefore, in the manufacturing industry, it is important to ensure that cheap purchases in countries with low wages do not also affect the quality of their own products. Quite often, suppliers from the Far East lure with unbeatable low prices, but here the quality usually leaves a lot to be desired. Savings of this kind can therefore affect the later product quality, which in turn damages your own reputation. Founders must therefore always find a good compromise between quality and savings.

Conclusion

Of course, reducing costs is not an easy task for startups, because individual adjusting screws have to be adjusted very carefully in order to ultimately achieve the most significant cost savings possible, which do not also affect your own quality. Small savings, for example in the area of ​​office and telephone costs, can have a big effect for young companies in the long term.