Stretching Your Startup Cash

Posted by: Rod Kurtz on June 6, 2006

Raising several million for a startup may sound like a lot, but the money can go fast. Here are some strategies to stretch the dollar:

First and foremost: Focus on your core competencies. Everything else you should outsource and delay payments as long as possible.

Office space: When shopping for an office, keep an eye out for special incentives and contests. Many commercial property companies have special programs designed to help startups. We started our company during our Babson MBA program, entered several business plan competitions, and won some great prizes, including our 1,600 square foot office.

Buy used equipment: Try to stay away from buying the biggest and “baddest” office equipment. In many cases used and slightly outdated products work great and cost a lot less. When you need the latest equipment — such as laptops — look into leasing to spread costs.

Affordable product development: Look to educational institutions for creative development. Many schools offer consulting or research classes for a fraction of the cost of professional firms. For instance, we sponsored a Research and Product Development class at the Rhode Island School of Design to develop our first products. This not only reduced our product startup costs but gave us a fresh perspective. Students are not encumbered by any corporate philosophies or bureaucracies, and this “freedom” produces some really original thinking.

J.B. Schneider and Antonio Turco-Rivas
Co-founders
P’kolino
Woburn, MA

Reader Comments

Carlos Perez-Landaeta

July 1, 2006 5:28 AM

As a college student and entrepeneur with limited real-world business experience I found this article compelling and useful. Focusing on the core competencies of your business and maximizing the utilization of resources by acquiring used equipment and obtaining technology through leasing to delay capital outlay is a creative strategy to stretch start-up cash.

lily

March 29, 2007 1:34 AM

Recommend you read a good book called No Cash Startups. I just read it recently. I think it may be helpful: http://www.nocashstartups.com/

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