10 Expenses You Should Avoid in Running a Startup

If you are an entrepreneur who has begun his – or her – first startup, then you might be a little bit concerned about the health of the future of your company. After all, startup adventures are extremely expensive to initiate. Many company owners pour their own money into building a startup, and of the most common mistakes that entrepreneurs make, it is spending their money on the wrong expenses.

For your business to succeed, there are going to be quite a few expenses that pop up that you should absolutely splurge on. In fact, there are going to be plenty of expenses that are also necessary for the survival and well-being of your company. However, as the person in charge of the success or failure of your company, you need to understand the difference between the necessities and the luxuries.

Your Startup – The Basics


Startups are extremely young companies that are usually founded by anywhere from one to three entrepreneurs. Usually, the goal of a startup is to launch a unique or fresh product or service and begin selling it to consumers. Most startups are funded with cash input from the founders and gifts from friends and family.

As a participant in a startup, one of your very first objectives will be to begin raising a substantial sum of money to continue product development. However, in order to do this, you are going to need to be able to show that you are spending wisely the money you started in the first place.

Further, investors usually want some proof that the product will be able to make enough money to give them a return on their investment. In order to prove this, your business must prove to be stable and you will also need to show that you have good decision-making skills regarding money, and what you do with it.

This is why it is crucial that you spend your money wisely when beginning to build your product. You need to show that you understand how to take a little bit of money and turn it into more money without wasting profit along the journey.

1. Expenses to Avoid


Like we have already mentioned, money is the number one issue surrounding most of the startup companies that begin today. If you want to build a brand that will make you and your investor’s money, then there are certain traps you should avoid in the business world. You also might consider a loan from as a source of funding.

For this reason, we have compiled a list of the most common places that business owners waste their valuable money. If you can avoid these ten money-pits, then you can save yourself a lot of heartache in the long run.

2. Expensive Subscription Services


Purchasing software used to run your business often requires an initial investment as well as monthly subscription services. The problem is that startup companies are not always large enough to need the bells and whistles that come with the most expensive package for the software. Try to use free or at the very least the less expensive versions of software until your company is financially stable enough to support monthly bills.

3. Dressing the Part


You are going to meet a lot of successful people throughout your journey as a business owner, but do not throw away your earnings on an expensive wardrobe yet. You can dress the part without the designer tag.

4. Furniture


Of course, you want your office to be comfortable, but comfort does not have to have a dramatic price tag. Place your focus on building your business, you can build a fancy office once you have the rest down the path.

5. Expensive Technology


Plenty of companies have become successful without the use of expensive technology. You do not need to purchase the next fancy gadget in order to have a successful startup.

6. Paying Staff


Many entrepreneurs make the mistake of hiring more employees than they really need at the beginning of their startup. Only bring on employees when you are sure that you are financially able to do so.

7. Parties and Trips


It might seem fun to throw a startup party celebrating your milestones, but these types of celebrations can get financially out of control very quickly. Save the celebrations for when you have more money than you know what to do with.

8. Marketing and Outreach


Marketing is an important step for any startup company to take. However, different products require different levels of marketing. Do not be fooled by the more expensive price tags – your investment might not be worth the money. When money is tight, be sure to use the less expensive ways to market your business.

9. Email Marketing


There are a ton of ways to waste money when starting a business, but a falling trap to one of the many scams that involve paying for email lists or buying followers is the worst. Your best bet is to build an organic audience.

10. Stationery


It might be a good investment to have some inexpensive business cards, but your company should not be spending extraordinary amounts of money on fancy packaging. Allow your company to evolve into fancier steps naturally.

Spending Money Prematurely


We have already mentioned how your money is probably scarce if you are anything like most of the other startup companies in the business world. This means that until you know your business will likely be a successful one, you should make decisions as if you have no money at all.

Final Thoughts

Each business startup is different and unless you have unlimited resources, the one thing your business startup has in common with the other startups is the need for smart financial decisions. The harsh truth is that most business startups do not succeed.

Many of those startups began with a decent amount of money and entrepreneurs who were hungry for success just as you are now. You cannot read the future, but you do have control over the money that you spend getting your idea off of the ground. Make wise choices now and you will be thankful later.

About Maki Voss