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Sunday
Mar102019

How to Save Money in Your New IT Venture

Taking the leap from being an employee to be your own boss and self-employed is a big deal, and a decision that you have likely stewed on for a long time. You have the IT skills and knowledge, but now you need to progress and build your business.

According to the Bureau of Labor’s statistics, approximately 20% of small businesses fail within the first year, and from those that survive, 50% will not see their fifth birthday. The principle reason for these failure rates is a lack of revenue and profit, and so you can see why making wise financial decisions in the early days of your venture is so important.

So, before you make any knee-jerk decisions, let’s look at where you can save money so that you can reduce your overheads.

  • Premises

While it would be nice to have modern and extravagant premises to house your business, the rental costs of office space can take a serious chunk of money that could otherwise be invested in the business.

In the early days of your business consider working from home or hotdesking in the offices of a local business. Many businesses would welcome being able to rent a desk or small office to you, rather than it being left empty. Ideally, you would find a space within an industry-linked business that you can collaborate or partner with, or at least swap referrals. If you need to meet prospective clients, you can meet them at hotels or spaces that you can rent by the hour.

  • Software Licenses

The downside of working for yourself is that you no longer have access to the software such as the PCB design system that you used at work; however, you need it to be able to do your job. While you can subscribe monthly for licenses, this can work out to be more expensive than purchasing a perpetual PCB design system license from Altium. Always look for the most economical way to purchase licenses – a little digging, and you will be able to find the best deal on the market.

  • Keep Personal and Business Finances Separate

When you start a new venture, you may be tempted to use your personal banking for business, at least until you get more established. This is a false economy. Not only do you risk having the IRS decline any tax deductions that you submit because they may consider your business as a hobby, but you will waste time sorting through your accounts. The messier your finances are, the longer you will have to pay for an accountant to prepare your tax returns. It’s best practice to start as you mean to go on.

Starting a new venture is exciting and terrifying in equal mix. The decisions that you make in the early days will impact the longevity and sustainability of your business. Keeping your running costs as low as possible is important, but that does not mean that you must compromise on the quality of the service or products that you offer. Good luck!