Building a Lean Startup: How to Manage Resources Wisely

Starting a new business is always thrilling for any entrepreneur, but it doesn’t come without challenges. Especially in times of economic uncertainty, there has to be some balance between your ambitions for your new venture and the need to ensure that it is a secure process. The truth is that it is all too easy for even the best-conceived business to experience difficulties in its early days, and mitigating this risk by planning a lean startup is one way to protect your investment. We’ll look below into how to protect your business by managing your resources smartly.

Smart financial management

Lean finances do not necessarily mean the bare bones, but you should be ready to strictly control spending in the early days of your business. Too many startups find themselves spending loosely at the beginning, because you need the right tools and people to do what you’re setting out to do. You need to answer two questions before taking any spending decision:

• Does it add value to the company?
• Do I need it now?

Some businesses - including healthcare ecommerce and travel companies - are inherently higher-risk than others. This doesn’t make them inappropriate for a lean startup, in fact if anything it makes those principles all the more important. This is where it is worth looking for a high risk payment processor and investing time in securing the right people. Lean spending isn’t “no spending” - it’s targeted deployment of your capital.

Automating for efficiency

Automation has its part to play in your lean startup, but - unsurprisingly, given the general tilt of this article - it is important to be careful with your use of automated systems. Used correctly, they can certainly save costs; using spreadsheets correctly can take a lot of the sweat out of keeping your accounts in order; AI and the correct CMS can remove a lot of the donkey work from getting a website up, running and looking right. But, of course, automation in business should never be a “set it and forget it” thing.

Invoicing and general operational tasks such as dealing with first-line queries from customers can be put in the hands of office software suites and chatbots among other automation tools. But the AI is not going to get called into anyone’s office if payments are late, so you do have to do final checks yourself. The point of automation isn’t to leave everything to the software; it’s to remove the bulk work so you can move quicker around the parts of the job that you shine at. Checking the figures and monitoring queries - a comparatively simpler process - is the trade-off for not spending hours doing things manually.

Scaling without overspending

When you’ve negotiated the trials and tribulations of the early days, the next step for your business is scaling. It’s a nervous time, because it will involve some spending in order to ensure greater achievements in future. But done well, scaling can bring a great deal of satisfaction and - of course - more income. For a lean startup, though, it is another case of needing to strike a balance. Scaling your business means bringing in more products or services, or reaching new markets. And you will almost inevitably need to call on the expertise of others to do this.

Either you will need someone who can do the things you can’t - building out your website, SEO overhauls and unlocking more funding are examples of where this might be needed - or you will need someone who can handle the inevitable overflow that comes with trying to build your business. And you will need to consider whether you can afford to hire a new member of staff, or whether it’s a case for outsourcing elements of your task list.

Consider whether you’re looking to tie off a project - in which case outsourcing is the way to go - or whether you need someone who can keep doing what’s needed on an ongoing basis, in which case it may be time to hire a new member of staff. If you need someone more permanent, then you’ll need to use your negotiation skills to ensure you give them a contract that you can afford while reflecting their value - and your desire not to lose them to a competitor in the near future.

Managing your resources is, as we have seen, not about spending as little as possible. Do that, and you will end up losing out on quality or spreading yourself too thin. But it is about ensuring you get the right people and the best tools at the right time without losing control of spending.