Entrepreneurs are often advised to ‘think big’. Sounds good…until it happens.
The number of corporate insolvencies is expected to increase sharply in 2023. With inflation rising, wages rising and consumer confidence falling, more startups are likely to fail this year than “usually”. In a way, however, we live in the golden age of business creation.Noted venture capitalist Bill Gurley even told McKinsey in 2022, “If you build something from the ground up, it could be as good as it has been in the last decade.” ever exist to save money. If you plan to start a business in the near future, here’s what you need to do now to cut costs and increase your chances of financial stability.
Many businesses are saying goodbye to expensive office rent, utilities, and other overheads associated with physical real estate. Some even spent big bucks for the distance, believing the move would pay off in the long run.For example, Pinterest paid nearly $90 million to terminate a lease on its San Francisco headquarters and go full-time remote in 2020. Entrepreneurs who do not need to spend money on office space to start a business can make better use of these funds.
Of course, many executives have different views on whether remote work is productive. However, you can save office space without sacrificing productivity by implementing work from home best practices. If you’re concerned that your new employees might be using Netflix at work, you can use top-notch employee monitoring software to remotely monitor their productivity.
Expand Your Talent Search
Another benefit of working remotely is that you can hire employees and contractors in low-cost fields, saving you money on salaries. Gurley drew attention to the case of cloud computing company PagerDuty, which he said “entered the pandemic with 85% of Bay Area workers and exited the pandemic with 25%.” Outside of the region, PagerDuty was able to hire talent at a lower cost, saving the company personnel costs.
However, keep in mind that working remotely and hiring employees wherever they are will add another item to your spend list: video conferencing services like Zoom. Still, you’ll likely come out on top as the cost of a Zoom account is low compared to the cost of office space and most salaries.Don’t make the $250,000 salary mistake.
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