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Contrary to popular opinion in Bollywood, I think that Cash is King. Singh is just bling.

This post looks at ways in which start-ups in India can conserve their cash and find ways to save money – highly relevant in today’s context where funding is slow and growth expectations might not be playing out as expected.

Thrift and kanjoosi are going to get your start-up far, so start immediately. Here is what has worked for us at iTrust.in. If you have suggestions on how you are successfully cutting your costs and expenses, do share your ideas in the comments section.

Office space

1. Get free office space: Ask your relatives, friends, school/university if they can give you free space. This will help reduce your office rental expenses. Instead of buying new furniture, use whatever old pieces you can get from anywhere. Why take on the capex of investing in things that will add very little value to the short-term future of your venture
2. If you do open your own office, don’t hire some fancy architect to design it if your neighborhood carpenter can do the trick
3. Do up the office frugally – don’t get false ceilings, buy reject fittings and furniture, buy cheap flooring instead of more expensive carpet which costs higher to maintain, use more glass rather than wooden partitions

Business travel

1. Stay with friends/relatives when traveling for work. If you must stay in a hotel, look for cheap options that are close to your meeting locations. Share rooms with your traveling colleagues
2. Use airmiles if you have any
3. Take afternoon flights, they are cheaper
4. If you can get a hotel industry association discount card through some friend/family, get it. You can then get discounts at participating hotels/restaurants. Will come in handy when you have to entertain clients/partners

Running Your Office

1. Watch your utility bills – switch off the lights/AC/fans etc, don’t leave your computers running overnight
2. Print double sided and in economode with lower tones to save toner; use cheaper quality paper
3. Rent your non-critical office equipment like ACs, photocopiers, coffee machine
4. Install an electric hand dryer in your toilet to save on more expensive paper towels – you will be surprised how expensive the latter can get
5. Watch your stationery costs – take free pens/writing pads from any hotel, conference, vendor you get offers from (but don’t steal!)
6. Recycle scrap paper; keep the pins, rubber bands and clips that you get in the mail
7. Negotiate with each vendor – even a 5% saving from your suppliers can leads to big amounts at year end
8. Outsource certain services so you don’t have to increase your headcount – HR, Company Secretary, basic book keeping for your accounts

IT

1. Buy cheap PCs – you don’t need the branded Dell or HP desktops. If buying laptops, see if you can get good deals around holiday seasons or promos. Don’t fall for buying expensive warranties if you are getting a manufacturers warranty at the time of purchase
2. Install free open source operating system (like Ubuntu) and an office suite of products (like Star Office) or use some cloud computing software. Why pay for an expensive software license for each machine when you can get decent functionality from free sofware
3. Use Skype or another VOIP service (TringMe) – why pay for expensive long distance calls
4. Get a deal from your telephone provider for your cell phones – corporate deals are cheaper for both voice and sms
5. If you have a land line, keep your ISD and STD locked

Finance

1. Maintain a budget and compare your actually profit and loss account to how you have been performing against your budget
2. Go after the highest cost items where the bulk of your costs might be – see what can be reduced, sometimes it might not be worth losing too much sleep over the smaller costs. Don’t be penny wise and pound foolish
3. Negotiate with your bank to give your better rates on your FDs. Threaten to walk away from them if they charge you fees or don’t give you good rates
4. Don’t overspend on your credit cards or incur overdrafts
5. Stretch your payments out to your suppliers, unless they call you or send in the goons, no harm if they can provide you with some working capital to fund your business
6. Use food vouchers to give to your employees, your employees can get a tax saving, and accordingly you can give them more after-tax income even though you might be paying them a lower salary

Remember, a penny saved is a penny earned. I know of no start-up that became successful by indiscriminately spending its valuable cash. So, get frugal asap!

Source: The author is a co-founder of a financial services start-up, www.iTrust.in.

startup, money

business

Last updated 633 days ago by រិទ្ធីនៃកម្ពុជរដ្ឋ (Ben)