Starting a new company or business can be exciting. You are finally going to bring your idea to reality and you will finally have that sense of freedom you may have always longed for. However, your life may suddenly become very hectic as you strive to get things done with the resources you have and as you start focusing on bringing in the revenue you may find yourself spending more than you bring into the business in your first years.

Although not breaking even in your first years may be totally acceptable for a new startup, there are ways which can also help in lessening the impact of your expenditures on your bottom line. Here are a few tips:

TRACK AND MONITOR ALL SPENDING

Whether it’s general expenses like postage and delivery charges or larger capital expenditures like hardware and computers, make sure you put in place a mechanism which allows you to track and monitor all of your startup’s spending. This system may be through purchasing good accounting software which will help you in recording your expenditures and monitoring them against the budget.You may need to consider hiring a full time staff in the future as your growth continues.

LIMIT YOUR FIXED EXPENSES

It may be tempting to splurge on your office or on a new laptop with high tech specifications for this new business idea but that may not be a very wise decision in the beginning. You don’t need elaborate office or extravagant looking letterheads and consumables in your first year in order to operate. Consider what your business really needs to operate at the lowest cost possible without compromising the quality of your services. Keep it simple and operate thin. Once your bottom line picks up you will have ample time to expand.

KNOW WHEN TO ADD CAPITAL

Carefully plan what assets you will need to invest into and when. Have a business plan and make sure your capital investment is in line with that plan. It may be tempting to invest in new technology because it’s new but make sure that such investments are in line with your ultimate strategy and that you can justify the return on investment of such capital commitments.

Layla Alqassab
Head of Finance, Benefit Bahrain
For more information:
www.benefit.bh