Startups - Rent, don't buy.

There has never been a better time to set up a new business, something already being reflected in employment statistics. In the UK, the percentage of the workforce now classified as 'self-employed' has reached 14.4%, versus a historic average of around 13% (www.ons.co.uk). Admittedly, some of this trend is likely attributable to the lack of alternative opportunities, or the unintended consequences of badly drafted welfare rules. But we'd like to think that the combination of economic malaise and a generational shift has emboldened more people to pursue their entrepreneurial dreams. Looking closer, the majority of recent improvement in employment has been a resurgence of hiring in the SME sector; those entrepreneurs become employers in turn, as their businesses grow.

Man is a tool using animal, Without tools he is nothing, with tools he is all

- Thomas Carlyle

Some of our clients are the archetypal 'one wo/man band', singularly responsible for product development, sales, business admin, and customer service. They manage to get the job done, while appearing hugely professional to their external client base through the sensible use of modern business tools. For example, Expensify and Xero make business administration tasks easy to incorporate into daily workflow - reducing the scramble for missing paperwork at month end, and a part-time accountant can take care of year-end reporting. New marketing channels such as Facebook and Twitter can give your product global reach, while retail partners such as Amazon (for physical product) or the App Store (for software) efficiently handle inventory and delivery. Maintaining an attractive company website with good e-commerce facilities can do both, directly and often at a higher margin. Providers such as Squarespace can make this a breeze.

Google provide a range of day to day business tools (email, calendar, cloud storage) at extraordinarily competitive rates, and accessible on both desktop and mobile devices. When your business demands that you be in multiple paces at once, it's important to be able to take your 'office' with you on the road.

If you do require a physical office, consider taking space (often just a desk) in a shared workspace such as The Hub - this will give access to a range of business services including reception, meeting rooms, and broadband. More importantly, it offers the potential to engage informally with your new neighbours; likely to be similar entrepreneurs, potential clients, or even valuable business mentors.

These are just a subset of the measures available to help small businesses to manage their cashflow in the early stages of development, to avoid unnecessary capital expenditure wherever possible, and to access a range of scalable services on an 'as needed' basis. The flexibility means more cash available to be deployed for growth and future returns, while creating a platform that can scale effectively as the business grows. It's all about cash vs profit, and flexibility vs cost - if you've been following this blog, you'll know our thoughts on these matters. If not, check the links.