How to Reduce Startup Expenses when Launching a Business


Most people who are launching a business underestimate the time, money and effort required in the initial stage. They end up spending more time and money than they had initially planned. While they are working hard to put everything in order to start the business on-time; the bills continue to pile up and it comes as a shock when they examine the total expense incurred before the money has even started coming in. This is just one of several reasons why an early investment in a good professional tax and accounting software platform is crucial.
There are good reasons to reduce your start-up cost. The less money you spend before you open your business, the more money you will have for advertising and promotion; which is crucial in the early stage. Besides, it will allow you to set more money aside for working capital; which is particularly important for first few months.
[Read more…]

How to Lower Fixed Cost to Achieve Financial Flexibility


We mentioned in the previous post that in this times of economic uncertainty your business needs to have flexibility to respond to changing market conditions. One of the ways you can do this is by converting as much of your fixed costs to variable as possible.
The reason for converting fixed cost to variable is simple – fixed costs don’t change with sales or production; while you can control variable costs in response to change in sales. Monthly rent you pay for the building is an example of fixed cost; whereas the amount you pay to buy raw material to make final product (commonly known as Cost of Goods Sold) is an example of a variable cost.
High fixed cost can hurt you in difficult economic times, such as now, and can even drive you out of business. This is what happened to many of the businesses that simply could not cover fixed cost with the sales plummeting. There are several ways in which you can convert fixed costs to variable. Below we have highlighted them.
[Read more…]