Entrepreneurship can be a very fulfilling journey, one that comes with the opportunity to be your own boss and leave a mark in the world. But it’s no secret that the failure rate of start-ups is high, particularly in the first five years.

Executive Business Coach Refilwe Khumalo says there is no set amount of money you need to embark on the journey of becoming an entrepreneur, but it is critical to analyse your personal finances before taking the leap.

She suggests the following strategies for saving money in your start-up phase:

Plan your capital

Unlike having a fixed monthly income, entrepreneurship – especially in the early stages – can present some uncertainty. Your income will be inconsistent, so it’s important to plan ahead.

Calculate your compulsory current fixed expenses such as rent and your variable expenses such as travel costs, phone calls and client-related expenses. This will help you to gauge the minimum amount of money you need to make every month.

If financial planning is not your strength, it’s important to enlist the help of a financial advisor to help you create an emergency fund for both your personal life and business because things don’t always go as planned. An emergency fund is crucial to take care of the unforeseen expenses that the journey may require.

Separate your finances 

It’s really important that you keep your personal and business finances separate. As the owner of the business you may be inclined to dip your hands into the till, but this will deplete your business funds and negatively impact profitability. Opt rather to use money made from the business to maintain and grow the business and put yourself on the payroll.


You can reduce spending significantly by partnering with other start-ups. Offer your services to your peers or colleagues in return for theirs, this way you stand to reduce overhead expenses such as human resources, tax, finances, marketing and digital.

Don’t commit to expensive real estate 

Many of the world’s most successful businesses were started in a garage, so don’t spend money on leasing or buying an office space unnecessarily. Opt rather to turn part of your house into an office or work from coffee shops if you can. Allow your business to grow organically and only when you need and can afford to, invest in office space.

Only get help when you need it

It is best to keep your staff contingent small in the start-up phase. Instead of employing staff, opt rather to hire people on a freelance or contractual basis. If their skills are invaluable and they prove to be good employees, then consider taking them on full time. It’s also advisable to keep salaries low but fair and steer clear of giving big bonuses in the early stages.

Keep overheads low

It’s important to be frugal, so shop around, buy second-hand office furniture and equipment, and barter and negotiate on prices. Every cent that you save can be better utilised establishing your business.

Use your social media smartly

Avoid spending on unnecessary advertising expenses and, instead, leverage your social media activity and platforms as marketing and advertising tools. Establish a Facebook, Twitter and LinkedIn account and post about competitions, special deals and new products or services.