Finance is one of the main, if not the main, challenge facing most startups. Just about any start-up can achieve success if they have what it takes to manage their budget. Unfortunately, most start-ups blow their funds on recruitment and advertising.

In this piece, we are going to take a look at some tips you should take into consideration to avoid becoming a contributor to the 50% of British startups that fail before their 5th year.

On Recruitment

“The companies that succeed most in the early days seem to hire slowly and fire fast” says Daveat Express Staffing. “If a new hire isn’t working out the staff member is unlikely to miraculously transform themselves into a ‘better fit’ for the job. Give new recruits a good shot, but have realistic time frames in place to judge progress.

Too many founders also recruit fast, chasing instant success. This is a big mistake. Regardless of how much capital backup you have, you need to be sure your hiring process is as water-tight as it can be, by either following strict laid down rules for each position, or outsourcing your recruitment to professionals”.

To ensure you are not wasting funds with your recruitment campaigns, here are some of the things you need to do:

● Avoid hiring a large number of employees at once. Too much change is difficult to manage.

● Make sure there is provision for a probation period, which should allow you to confirm the competence of the staff.

● Avoid employees that are doing very few hours each week. Instead, consider hiring freelancers to complete small tasks.

● Do not hire an employee you may not really need till 2 to 3 months into a project, even if your budget can afford it. There is no such thing as “trying to avoid missing out on talent” you will always find someone for the role in future. So for instance, hiring a sales leader (no matter how talented) when the product design is still in its early days is a waste of funds.

On Advertising

Startups waste funds by rushing into advertising well before they have a clear strategy of how to achieve results with the advertising. Advertising is costly, so you cannot afford mistakes. A witty and properly planned ad will achieve a lot more than a scatter-gun campaign, which will do nothing more than bring some exposure. Mind you, exposure is good, but what use is it if it doesn’t add to the bottom line? You need to take a sniper approach and be focused on your prospects, not on your products.

A good example of an interesting campaign is this one from the mobile company One Plus One
. It helped the company achieve fame and also helped them to focus on the quality of their products, while gradually bringing in customers. As a rule of the thumb, in the early days you should avoid advertising spend that doesn’t bring in real, measurable results. Brand building is vital, but if your cash flow exceeds your capital constraints for too long you will fail.

With these tips, you can help your startup grow gradually, while spending your budget wisely.

Author's Bio: 

My name's Bill and I'm a blog writer who specialises on health matters. I enjoy sharing the knowledge I have learned from working within the medical services.