Cutting Operating Costs for Start-ups By Ozioma Ubabukoh

Cutting Operating Costs for Start-ups By Ozioma Ubabukoh
  • PublishedMay 16, 2018

Start-up businesses should be making use of value added services to decrease the cost of running their enterprises.

That is according to Mags Ponnan, Head of the FNB Business Incubator, who adds that entrepreneurs need to learn that running a cost heavy business only make it harder for a new business to make a profit.

Going through an exercise to lean down the business model will create a far more sustainable way for the business to operate effectively with a focus on its core offering.

“We encourage entrepreneurs to start their business at the lowest cost and save wherever possible to give themselves freedom to invest the funds in areas of the business that are key to its success,” Ponnan said

“The key takeout for entrepreneurs here should be to make use of the many value-added services that usually accompany a business bank account. These are tools and platforms that we offer FNB Business accountholders to decrease their monthly operating costs to a bare minimum, enabling them to invest money where it is most beneficial to the business bottom line,” Ponnan said.

Effective ideas for start-ups to save business costs ideas

Starting and running a business on your own is a risky affair. It requires a lot of hard work, dedication, creativity and sound planning. Also, one needs is a decent amount of cash flow to run the company. The more cash you will save, the easier will be your initial entrepreneurial journey. If you have a tight budget, always know the difference between necessary and pointless spends. Also, keep a track of all expenses and cut down wherever and whenever required.

Entrepreneur India lists down a few lucrative ways for start-ups to cut costs in the beginning.

Hiring done right

Nalini Jindal, Chief Investment Advisor, Intellistocks, feels there are no simple ways to cut costs. A start-up requires employees with a specific skill set and a lot depends on each and everyone’s performance. A bad hire costs a company approximately six months of time, recruitment cost, payouts etc.


Jindal emphasised that hiring and assigning responsibilities with the right skill set helps achieve efficiency in work, keeps the employee happy and keeps attrition rate to the minimum which is very important for a startup.

She further added that as a startup, narrowing the business focus to the more revenue generating and efficient projects rather than taking up too many projects/customers at once is a good idea. So, one must do a cost-benefit analysis and reduce the opportunity costs.

“This way one can be more productive and produce high-quality work thus generating more revenue,” added Jindal.

Pay your employees more

Gagan Kapur, Co-Founder & CEO, EasyBuyHealth, recommends to save cost, startups must pay people better and hire experienced professionals.

“It will help you reduce the learning curve and avoid costly mistakes. Pay them more, and expect more from them, which means no need to hire unnecessary junior resources. Secondly, follow the principle of hire fast, fire fast, which means reward the good people, remove the bad people,” shared Kapur.

Make most out of networking events

Bhavik Mehta, Director, FinREQ, believes cost or expense is a key issue for any startup that can determine whether it will be able to survive a market or not.

“The good news is, if you master the art of trimming expenses early in the game, you’ll develop good habits that’ll serve you well as your company grows. Word-of-mouth is the best and cheapest form of advertising, but that means a lot of networking. Attend business and community events to talk about your company, and don’t forget to focus on your most desirable customers. You can develop the art of becoming a good speaker,” said Mehta.


A snazzy office, the latest equipment, smart employees and the option to complete a project on your time, and perhaps at the beach – many new entrepreneurs dream big when they plan their first venture. The only problem is that a new business is much more about hard work, sincere efforts and reduction of costs than the way they picture it.

It is important that you pay attention to how much you spend when you begin a new business. Spend just a little above your means and your dreams could fizzle. You need to keep track of all expenses and cut down wherever and whenever possible.

You may not be able to cut down on certain expenses such as trade licenses, business permits or any other aspect that directly affects your business. But there are ways that you can reduce costs and still attain your dream.

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