How to cut costs in your startup
Struggling? Here are 5 innovative ways to cut costs in your startup
Entrepreneurs face various challenges, but amid today’s global pandemic cash flow has proven to be one of the first. Indeed, cash flow was already one of the most important hurdles for startups, as founders have always struggled to determine their budget priorities.
Cutting costs or paying attention to certain elements in your budget is not about saving money, but rather about making smart choices for the future of your company. Using a cheaper supplier might save you some cents today, but cost you more time and resources in the future. Making smart choices is about building a sustainable and long term business.
So with no further ado, here are 5 ways to reduce your costs, which any startup can implement.
- Use OKRs and start creating processes
If you haven’t done so already, the first steps to take is to use OKRs. Objectives and Key Results (OKR) is a critical thinking framework and goal setting methodology which can help you align goals and ensure everyone is working collaboratively on goals that matter. Moreover, by using this framework you’ll be able to track outcomes. OKRs can be implemented at first by using spreadsheets, and, later on, an OKR software. OKR methodology differs from other goal-setting methodologies such as balanced scorecards, and KPIs. To learn more about OKRs, a good starting point is reading Radical Focus: Achieving Your Most Important Goals with Objectives and Key Results by Christina Wodtke. The book is told as a story that follows a struggling startup that turns things around by embracing OKRs. You can also watch Christina Wodtke tell the story of her book (27 minutes) here: Accomplish Big Goals With Objectives & Key Results.
Once you have created your OKRs, you’ll need to organize internal processes for your startup. These do not need to be complex structures but ensure a way of working. Kanban methodology might make sense for your business. Kanban, an agile methodology, is a method for managing the creation of products with an emphasis on continual delivery while not overburdening the development team. Like Scrum, Kanban is a process designed to help teams work together more effectively. Moreover, Kanban teams focus on reducing the time it takes to make a project (or user story) from start to finish. The team can do this by using a kanban board and continuously improving their flow of work. This goal-setting system has been employed by the likes of Google, Intel and Bono to set and execute on audacious goals, so there are a lot of resources out there you can check.
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