Reduce Your Start-Up Costs by Outsourcing
This article discusses how outsourcing can dramatically reduce the cost of launching your startup, sometimes by up to 90%.
So you’re thinking of starting a business. Chances are that you’ve got your business plan (even if that only means a few scribbled notes) and you want tp open your doors and start making money. Right now.
Visual representation of purchasing power
If you’re like me and 99% of entrepreneurs out there, the first thing on your mind is ‘how am I going to get this all done’… followed by a glance at your bank balance, and the thought that another $100k would be nice 
But you don’t have it, and you don’t want to keep your day job and save for the next 10 years! So now it’s time to ‘bootstrap’ and cut some corners (Jules Edit: alternatively send your partner out to get a permanent job so she can support you and your business!) and see how far you can stretch your coin. Cash is king as they say, and you need to preserve it.
You need to get online…
As a bare minimum, you’re going to need a logo, a website and a domain. Even if you are going to operate a strictly ‘bricks and mortar’ business these are fundamental to your success.
Why go to the expense you might be thinking? I don’t want to sell anything online!
The internet is by far the cheapest method for reaching and communicating with potential customers. What you spend on your website, you’ll make back in savings many times over. Your customer’s want to find you online.
You might need stationary too…
Depending on your business, business cards, pamphlets and other physical branding products could be important to enhance your credibility. Real businesses have business cards and flashy brochures… don’t they ?
Jokes aside, if these are a real need in your business then you’re going to have to shell out for them, and they’re not cheap for a start up. You can’t sell them, you can’t eat them, you can’t trade them, and they won’t pay your rent. So they’re an expense we want to minimise as much as possible.
The good news is that all of the effort you put into your website and logo can now be recycled and used to develop your physical materials.
This stuff adds up…
To get this done locally you’re roughly looking at:
- $300 - $800 for a decent logo design
- $1200 - $3000 for a clean but basic website (add another $500 for useable shopping cart)
- $200 - $600 for the graphic design of your cards and brochure(s)
- $20 - $40 month for website hosting with a local ISP
Startup Expense: $1720 to $5000+
And you haven’t spent a dime on anything that will directly result in revenue.
Purchasing Power to the Rescue – Crush those expenses by 90%
Start-up costs are one area in which offshore outsourcing can really shine. The purchasing power of your local currency, can help you to reduce the price you pay for these services. For example, if you live in the US, $1USD can buy far more in India, then 1 Rupee can buy in the US. This disparity is caused by a difference in the relative value of the currency. (See a discussion on purchasing power here).
What this means for you…
This means you can use the strength of your local currency to get discounts by buying services in another country. All of these one off expenses can be minimised, leaving you with enough cash to survive. By outsourcing your start up activities, you could expect them to spend around:
- $50 - $100 for a decent logo design
- $120 - $300 for clean but basic website (add another $50 for useable shopping cart)
- $20 - $60 for the graphic design of your cards and brochure(s)
- $2 - $4 month for website hosting with an international host
Startup Expense: $220 to $450+
I’m not exaggerating…
As you can see, there are some dramatic savings available. These are not exaggerations, but real prices that can be achieved right now. There are additional risks in outsourcing, but these are only marginally higher then if you were to use a local provider. Start with a small project to get your toes wet.
This approach helps you maximise the power of your limited cash, and it frees more of your money to work on other things. For example, you may opt to build a bigger, flashier website. Or you could spend what you save on a web marketing campaign to get those customers banging on your door sooner. It’s really up to you to decide what’s important in your situation. The benefit of outsourcing is that it unlocks these choices and gives you flexibility that you otherwise would not have had.
So, reduce your expenses, preserve your cash on hand, and increase your chances for success!