Lower your startup costs by buying used items

Startups tend to have the false belief that everything that they need for the business have to be brand new. I had personally seen startups which invested considerable sums of money to renovate the office, purchase new costly furniture, laptops, office equipment, and other capital items. This happened even before these startup received sufficient revenue for their services in the initial stages. In fact, they only had an order or two at this stage. Two years after, I heard that one startup had closed completely, while another downsized to a shared office.

The time needed for the startup to build up the business can be considerable. Nobody is an overnight success. Therefore it makes much sense to reduce the burn rate as much as possible. This would make the capital invested last as long as possible in the initial stages.  This requires reducing the amount to be spent on furniture, laptops, office equipment and so on.

If you are equipping an office, chances are that you require partitions, office tables and chairs. Although the paperless office appear to be closer to reality than before, my guess is that most people would still need cabinets for files. Now these furniture need to be sufficiently durable to withstand the rough and tumble of an office. However they need not be brand new. You may be asking what if clients drop by and see the used furniture. Well, my reply is that the client probably would not be bothered unless the furniture is really in a dismal state. So what if the used partitions do not totally match the color of the other furniture.

One should be able to locate a used office furniture outlet near where the startup is going to be located. In all likelihood, you could save up to 50% in purchasing used furniture.  The reduction in the amount invested should help to reduce the losses likely to be incurred in the initial stages due to the lower depreciation amount. This means that the chances of the startup turning a profit are very much higher than another equipped with all brand new furniture, all else being equal. At the same time, the breakeven point when cash flow turns positive would come considerably earlier. Therefore the probability of the startup being viable is significantly higher than another startup which invested in brand new furniture. And to top it all, you could launch the startup with much lower capital.

If you are not convinced, download the StartBizUp App and do the sums.

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