COST-SAVING SOLUTIONS FOR STARTUPS AFTER COVID

COST-SAVING SOLUTIONS FOR STARTUPS AFTER COVID

Saving costs for businesses is the top issue after the period of temporary suspension of economic activities due to the impact of the epidemic. Small and medium enterprises, which are start-up groups, have been facing many difficulties.

As a test of "survivability" for businesses in most industries, the Covid-19 pandemic has caused about a quarter of startups around the world to cease operations later, of which there is Vietnam.

According to the General Statistics Office, from April 2021 in the Vietnamese market, there were nearly 60,000 enterprises temporarily suspended from operating, this number increased by 23% over the same period in 2020.

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Saving costs for businesses is the top issue after the period of suspension of activities

Besides finding solutions to save costs, businesses often encounter the following 3 basic problems:

1. 3 problems startups often face

Human resources and personnel structure

Depending on the size of the project you are participating in to have a staffing plan and attract human resources for efficiency.

For small projects, which only need 1-2 employees, finding and managing is not difficult. But if it is a project that requires the contribution of more than 5 people, it requires you to have more skills to coordinate the work smoothly and effectively.

• How many partners are needed for the project?
• How to find suitable and qualified associates?
• How is it reasonable to divide teams, assign roles and tasks?
• How to connect and help people agree, determined to reach the goal?

There are many questions to ask when you want to have an effective team. And this stage is when you lay the first bricks to build a business. Having a core group of personnel will reduce your project's risks and have more opportunities to call for investment capital. But to have a dedicated working group, it is not easy for every Startup to build.

Skills, knowledge, experience

Knowledge is something that can be learned, but skill and experience take time. Many young people are very confident with their startup projects and many of you fail on the first project.

In terms of knowledge and expertise to start a new project, you must also have more than 90% knowledge in the field to be invested. But skill and real combat experience will never be enough.

Confidence is good, but to reduce business risks, Startups need to equip themselves with specific skills and plans both in the short and long term.

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Finance and costs are the top issues that all businesses, large, small, and start-ups face.

Going too fast- creating holes in the company structure

Growth rate is a measure of the success of each project. However, there are still many projects with growth rate of 100-200%/year but also quickly encounter many problems in organizational structure.

Development must always go hand in hand with management, expertise and skills that will help your project go faster, stably and go further.

2. Finance, costs- The biggest concern of businesses

Finance and costs are the top issues that all businesses, large, small, and start-ups face. The balance and increase of finance is always the top goal and also a common concern of all businesses.

Not only capacity but also strong financial resources will help the company develop faster. But how do startups get large capital when starting out? How to optimize costs in the best way?

From the perspective and experience of a startup from a startup, Arental shares with young talents the solutions to the two problems above.

Optimizing fixed costs

There are two types of expenses that account for the majority of the monthly budget: personnel costs and office rental fees.

Personnel costs: It will be difficult to cut down on this cost when there is a specific work assignment plan. Then you can change the form of cooperation, instead of full-time staff you can use collaborators to reduce costs. However, there needs to be a way to measure performance.

Or you can refer to using the services of external departments: accounting department, marketing department, human resources department... provided by professional agencies.

Office rental costs: If in the past, businesses had the habit of using traditional offices, renting and had to invest from a to z in equipment, furniture, etc  which take up a huge percentage of their budget.

You can refer to the following 3 forms of office to save 40-90% of the cost.

• Virtual office: This is a form of leasing an address to carry out legal procedures and business registration. This form is completely legal and saves up to 90% of costs.
• Packaged office: With this office form, businesses do not have to pay initial investment costs in equipment, avoid additional costs such as electricity, water, maintenance ... during use. You can ask the lessor to design and arrange the office in accordance with the number of employees available.
• Renting a working space - shared office: This is the type of office that provides the most youthful and dynamic working environment today. Professional office space with full service from parking lot, tea, air conditioning, wifi... all package from only 1.5 million/month.

Promote investment, increase existing capital

There are two ways to quickly increase capital to promote investment:

• Calling for capital from investors: Prepare a best development plan, based on existing strengths, indicating the potential of the project. Believe that you will receive not small investments.
• Join incentive programs, start-up loans at banks.

Some of you will be afraid of bank loans, but please research carefully. There are many preferential interest rate packages for business loans at banks today.

There are two types of expenses that account for the majority of the monthly budget: personnel costs and office rental fees.

You can also see more articles about preferential interest rate programs for businesses loan at 5 big banks in Ho Chi Minh City. The article will provide you with information about the conditions for businesses loan from banks, start-up loan packages of Agribank, Vietcombank, BIDV...

For a successful start-up project, it requires not only professional knowledge but also management and operation skills. We hope that the information shared by Arental can help young talents in business development.