Saving, investing and making money with technology

Day: November 14, 2016

3 Simple Strategies That Save Startups Money

There’s probably no tougher time than when you’re beginning a startup. Money and time are especially tight at this stage. The work is never ending as you try to get your product off the ground.

On top of those concerns, there’s always that nagging doubt over whether you’re doing the right thing. These are all totally normal problems that every startup — even the super successful ones — have gone through at one point.

There are only so many hours in the day, as anybody in a startup knows, so there’s not much to be done about saving time. Money, however, is a far different resource. There are ways for any startup to save money when they’re in their earliest and leanest stages.

Saving money, even a little bit at a time, goes a long way in making a startup sustainable. If you’re wondering how to stop burning through resources, you’ll want to follow these three strategies:

1. Don’t Buy New Unless You Have to, and Trade If You Can

Stocking up on new equipment, whether it’s machinery, computers or just about anything else, is especially challenging in the earliest days of a startup. Instead of buying new, it’s almost always a better idea to go second-hand or upgrade your current equipment when you’re trying to get your business off the ground. While the equipment might not have the satisfying “new” feeling, second-hand goods will be considerably cheaper and are often at least as good as a brand new version.

Scour website listings and check your contacts for leads. If you do your research right, you will likely find items that suit your needs perfectly.

Alternatively, you can even try bartering your services in exchange for other services or equipment. This isn’t uncommon, as some startups have an unused capacity that other businesses could benefit from. Maybe you’re an exceptional bookkeeper who can help out, or perhaps you have top-notch programming skills. Whatever it is, you can use those skills to save money and help out a fellow business owner.

2. Turn to the Gig Economy If Needed

Money can be your best friend or biggest enemy when at a startup. To earn some extra cash on your own time, consider the gig economy. Time is no doubt tight, but there are a number of micro-job sites out there where you can put your skills to use.

Helping out with some coding, for instance, won’t make you rich or solve all your financial troubles. It does, however, help stretch out your money so it can last longer than it otherwise would.

If you’re starting off in the gig economy, keep close records of the time you spend and the money you earn to see if the jobs are worth your time. In some cases, the money isn’t worth the time. If you play your cards right, however, then you can earn a decent amount of money.

3. Know the Most Important Numbers

Data is totally underrated as an asset, even though it’s one of the most valuable things a startup has. If you track your data, whether it’s sales, website traffic, engagement, etc., then you can make smart decisions. The right calls based on the data will make your startup more efficient and ensure you aren’t wasting your resources.

These numbers don’t have to be solely about customers or revenues, either. Knowing internal figures about how your startup is operating can ensure you’re investing in the right places. For example, businesses report that 74 percent of ongoing client communication is done by phone. If that figure applies to you as well, then you’ll be able to come to a sound decision about what kind of communication system to use.

Getting Into Good Habits

There are so many things to stress about at a startup, but developing good financial habits will lessen those stresses. Follow these practices, and you’ll find your startup in a strong position.

Image by iDriss Fettoul

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An Overview of The Cost Involved In Home Loan

Owning a home is a lifetime ambition for many. Arranging finances for your dream home from your own funds is a tad bit difficult; spiralling real estate costs have made it a hard task for the average middle class Indian to own a home without the support of a Home Loan.

A Home Loan is the most popular source to finance a home purchase. Before you decide to sign on the dotted line of the Home Loan agreement, it is necessary that you examine the clauses in detail so that you’re not caught unaware in the future. You also need to arrange a guarantor for Home Loan. Interest on the Home Loan, calculated with a Home Loan emi calculator is not the only charge that is attached to a Home Loan. There are other cost involved in Home Loan.

Charges and fees with respect to a Home Loan

* Processing fees

All Home Loan borrowers have to necessarily pay the processing fees levied by the lender. This fee is charged towards verification of documents and other loan related procedures. These charges vary between banks as they have the liberty to fix the processing charges. Usually, most banks and NBFCs charge between 0.25 % to 1.00% of the loan amount as this fee.

The loan processing charges needs to be paid at the time of making the Home Loan application itself and is non-refundable.

* Home Loan insurance

Home Loan repayments in the form of EMIs can take a toll on your monthly finances. It is also a high risk situation for the lender as well. Home Loan insurance cover is taken to cushion against such exigencies. Most banks, especially in case of Home Loans taken in the recent past, have mandated the need for insurance cover. The plan covers only the outstanding loan liability.

* Legal and technical verification charges

After you submit your property documents, the bank’s legal team verifies the authenticity of the documents.  Your antecedents and your financial history are tracked to assure that you’re a genuine borrower who has the repayment capacity. A technical verification is conducted to check the project viability in case you’re taking a Home Loan for an under-construction property.

* MODT charges

Memorandum of Deposit of Title deed charges are levied on all Home Loan borrowers. It is an undertaking that you‘re depositing the title deeds on your own volition in return for a loan. This

undertaking needs to be registered, thus needing the payment of stamp duty which is usually 0.1% to 0.2% of the Home Loan.

* Loan conversion fee

If you want to benefit from the falling Home Loan interest rates, you can switch from fixed to floating rate loan. However, the bank will charge a conversion fee/switching fee—about 2% of the outstanding loan is generally charged.

* Prepayment charges

In case you have idle funds and want to make a prepayment, the bank may allow you to do so at some extra cost. Generally, it is around 2% of the outstanding loan and varies between banks. The prepayment charges are applicable only on a fixed rate Home Loan.

The cost of the Home Loan actually increases after taking into account all these costs. After availing the Home Loan, if you default on the EMI payments, you will be levied late charges as well.

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