Being a small business owner, you need to do a lot of experimenting and getting some bits of advice from others. However done, you will have to practice cost-saving measures to keep your business margins up and stable. Statistics say that 70% of people who start their own business, give up at the end of the 20th month because they lose most of their funds. Another 29% of people give up when they lose all their money. It is just the 1% that continues to pursue their desire. Let us see how to be one among the 1% that is changing the world.
Moreover, 2020 has been a nightmare for most small business owners. So, to keep your business afloat amidst the financial grippings, you shall spend some time thinking about ways to cut your costs. Here are 8 curated tips to cut down your cost in small businesses.
Tip #1 – Avoid spending money on meetings
When you are starting a small business, you inevitably need to be meeting your co-workers and employees often to discuss the progress or to formulate new ideas. Most of the people focus on fixing the meeting in a reasonably good restaurant. This decision brings with it the burden of spending money on food; the money which could be used somewhere else even productively.
As you become a business owner, you should pay your workers. And in that stage, it is highly advisable to spend most of your funds on developing your business. As an alternate way, as long as the meeting doesn’t involve any business dealings, you can have it on online platforms or phone calls.
Tip #2 – Let technology help you
At any point, if you feel that you should save more money in your business, turn your attention towards technology. Over the decades, technology has helped thousands of business owners save their funds and their valuable time. Starting from billing, you can bring in automation in procurement, invoicing, file sharing etc.
If your way of accounting for your business is by appointing a person who manually enters the data, then you can go for automation techniques that finish the work automatically and efficiently. For instance, if you are using QuickBooks for accounting, you can use PayTraQer to automatically sync your online transactions into QuickBooks Online. Such applications are your one-time investment, you can save hundreds of dollars that you spend for manual data entry. You will also get precise and intact records in a faster turnaround. Try to update yourself to the trends of the world so that you can use modern technologies to work for you.
Tip #3 – On-point marketing strategies
There is no doubt that marketing is the key to your business. But it is evident that many companies went bankrupt just because they failed to handle the marketing properly. While starting your business, you might have an avalanche of investor funds that you could use to improve your business. But that should not make you greedy.
Some people spend most of their funds on marketing through social media. Though social media is a great platform to promote your business, any inorganic and instant promotion of your goods or services will be a problem in the long run. At first, it might seem like the followers for your business are increasing constantly. But remember that there are chances for a sudden dip and all the invested funds will be of no use.
So, before investing money in marketing, learn about it properly. Do some research and analyze patterns of promotions before you invest a single penny. Be mindful of your target audience and always be on the safer side because you have many families to feed. Instagram, YouTube, and Facebook are the most popular platforms where, if you spend the money wisely, you can get a lot of customers.
Tip #4 – Lean Management Principles
One thing you must concentrate on before meeting your investor is to have the right mindset for your business. Any investor would be impressed if they know that you are a person who does not waste money on things that do not matter. For example, you need an office for the company. If you want a luxurious workspace, air-conditioned rooms and high-quality laptops, the investor will think that you are focusing on instant gratifications and that is not at all a good sign.
Not only in your office, but you can implement lean management principles in every aspect of your business. Eliminate everything that will never add value to your company. Work on this principle and regulate your operating costs effectively.
Tip #5 – Project management tool
It is an automation tool that keeps track of your project more effectively than humans could. Of course, these tools should be paid for the work they do, but it is an intelligent investment as they help your business grow exponentially. Another advantage of using a project management tool is that your headache of explaining to your investor each step of the project will be removed.
Also, these tools help the teams of your firm monitor the progress. There will be so many tasks for you as the owner and if the project management is done automatically, you can concentrate on other things.
Tip #6 – Reduce or eliminate office space
If you have told someone that offices can be remote in 2016, he/she would not have believed it. But today, it is possible. As Covid-19 demanded everyone to stay in their houses, companies found a way to make their workers work from home. What was once theoretical is now made practical. So, if you do not have enough funds to start an office for your business, you can go with using a remote office. Video conferencing gives answers to all the problems related to remote offices.
Tip #7 – Use outsource staffs
On a contract basis, some outsourced workers could do your work more effectively. Unlike normal employees, you do not have to provide them with a computer, phone, or office space. And that saves a lot of your money. You can also provide the outsourced employees with less work at appropriate times, and this helps you when you have fluctuations in your sales.
Tip #8 – Save money on HR functions
Most of the companies lost a large part of their funds in HR functions. This is because of the long and expensive process of hiring, fake job roles, and a larger number of employees turning over. If you make your HR department function efficiently, you can save money not only on the department but on various levels of your business. Go for automation to do the work that needs hands-on labor. Hiring could be done online to reduce the loss of funds. You can also use technology to process the applications of your recruitment.
Cloud-based HR software helps a lot of business owners to maintain employee relations, payroll, and training. Choose to spend more time and energy on the HR department so that you could pick the right employees for your firm without diminishing your money.
These are all the steps you can follow to lessen the expense of your business. If you want yourself to be one among the hundred you must be disciplined with the above aspects. Work on your mindset as much as you work on your skills because the right mindset is mandatory for a successful entrepreneur.
Sticking to a single defined plan will not work in business. There might be instances when you need to give up on certain things to keep your funds flowing. Always choose the funds of your company instead of other pleasures. Thinking about the long run will help you control and maintain the funds of your investors and will take you to success. Your dream is too big to be thrown away for having instant gratification and short-term happiness. While you spend one part of your thinking on expanding your business, let the other part think about limiting your expenses.
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