How to Save on Small Business Initial Investments

The initial investment that comes with starting your own business is often significant. In most cases, it is this initial outlay of funds that keeps the majority of people from starting their own business in the first place. You will want to take every measure you can to protect your capital. Here are a few suggestions to help keep your initial investment under control.

Scrutinize Your Purchases

Think about every purchase that you make for your new business in detail. Do not rush into buying anything that is not absolutely necessary. You want to succeed in business more than you want to look good in failure. Make sure that each purchase is absolutely essential to your business's success. If it is not, then you should probably wait to buy it. This line of thinking will go a long way towards preserving your precious working capital. You will need money to stay in business once you get going. Therefore, you should not blow through your entire load of cash in the beginning of the project. 

Lease

Many new business owners fail to realize the benefits of leasing equipment instead of buying it. You should also look into leasing your business location instead of buying the property for it. When you lease property, you are limiting your risk and saving your capital. For one thing, you will be paying quite a bit less upfront. When you buy new equipment, you have to come up with the entire amount for the purchase all at once. When you are starting a new business, you really can't afford to do this in most cases. Therefore, leasing presents a unique opportunity to keep your money in your pocket.

You don't have to come up with a large down payment and the lease terms can be designed to be flexible. You can forget about complicated depreciation schedules and all of the hassles that come with owning your own equipment. You can pay the sales tax over time instead of all at once as well. 

With leasing, you are also protecting yourself against inflation. You lock in a price for the lease for the next several years. By the time the lease is up, the equipment would have cost much more than what you are currently paying for it. This can help you save money on the front end and throughout the life of the equipment.

Grants

While grants are harder to get, they represent an opportunity that you can not afford to overlook. There are many federal grant programs out there that are designed to help start new businesses. Look through the grant database before you get started with your business. When you can get free money, you might as well take advantage of it.