As far as entrepreneurship is concerned, every penny counts. While you try your best to pool resources to set up your business, your employees and suppliers deserve their paychecks. To meet the growing financial demands that come with putting up a business, you may have to implement good economic policies to unlock extra cash and save more money. Here are some ways through which you can cut down your business expenses and save cash.
1. Get rid of surplus equipment
During the start-up phase, some business owners strive to acquire tons of equipment. But as operations begin, some equipment may become redundant. Examples include printers, ink, toner, and cartridges. Surplus equipment takes up much of your office space. Moreover, they wear out with time, and will gradually depreciate when you don’t get rid of them early enough. Instead of watching your unused printer ink and toner waste away in your office cabinet, why not sell them to suppliers such as Sell Toner. This way, you will make extra cash while getting rid of surplus equipment.
2. Set up a virtual office
Thanks to technological advancements, businesses don’t have to tether their offices to one location. You can run your business while staying at home by using technological tools to connect with your staff as well as your customers and business partners. Virtual offices allow you to run your business with little resources since you don’t need to have a physical building. Focus on establishing your customer base, after which you can then put up a commercial building.
3. Use Open-Source software
A lot of business software is reconfigured open-source software from volunteers in the business community. This means that they are obtained from non-proprietary sources. Comparatively, open-source software costs far less than proprietary commercial software. Whether you want accounting or bookkeeping software, there are several non-proprietary software that can help you save money while getting your basic tasks done. However, you may have to bear with the fact that the support service for open-source software is limited. But the good news is that business owners who use open-source products can join community forums to access support services from other users.
Usually, bulk-purchasing is cheaper than when you buy products individually. Before ordering products from your chosen supplier, ask them for discount offers. Many suppliers will be willing to slash off prices for customers who have a long-term business relationship with their company. Do some research and find multiple suppliers, negotiating prices before you settle on the most cost-effective. Also, do not tie yourself to one local supplier. To increase your sales opportunities, move out of your comfort zone, and connect with suppliers who offer discounts on shipping and bulk orders.
5. Track the flow of your cash
Another vital activity for saving money is tracking cash flow. When you track the flow of your cash, it saves you from incurring late payments fees — also, you will not miss your bill payments. The majority of small businesses often fail because they are unable to conserve their cash. The opportune time to start tracking your cash flow is during the initial phase of your operation. To generate revenue, your funds have to pay your regular expenses, including the unforeseen ones that may erupt. By looking at the statements of your cash flow on an annual and monthly basis, you will understand the value of your cash and whether it’s enough.
6. Reduce your expenditure on traditional advertisement
With the rise of the internet revolution and digital marketing, business owners have the means to cut down their costs of traditional adverts. Reach more audiences via the internet by using paid advertising resources such as Google AdWords. Use search engine optimization techniques to build a great website and attract customers to your business. Some business owners are able to garner hundreds of thousands of views by creating videos on YouTube to promote their products. This is almost a free way to advertise your business to a global audience. Traditional advertising platforms are expensive, and may not broadcast your business to wider audiences.
7. Outsource some tasks
When you have a strong team of full-time employees, your business has the potential to grow. However, permanent employees also sometimes cost a business its financial resources. Salaries, insurance covers, and office spaces are some employee-related costs that businesses often struggle to settle. So, consider outsourcing your tasks to virtual assistants (VA’s) to reduce your workload, improve work efficiency, and save money. Virtual assistants are skillful people who work from locations across the globe to get your special tasks done in time. Since VA’s have their own office spaces and equipment, you can save money assigning repetitive tasks to them. As a business founder, this will free up more time to focus on building the core parts of your business. Negotiate with independent contractors like VA’s, and you are likely to make a fair deal that will benefit both of you.
The Covid-19 Pandemic has turned the world upside-down. It has negatively impacted the global economy to some extent. For businesses whose finances have been hit hard by the pandemic, laying off workers may be an idea worth considering. This will have to start with an evaluation to find out which employees go and which stay. However, since employees form the backbone of your business operations, and you don’t have to fire all of them even if times are hard. If you do so, your business may suffer disastrous consequences.
Instead of laying off all your employees, negotiate with them for a pay cut. If you were providing them with free three-square meals a day, reduce it two or one. For example, assure them of their breakfast and cancel their lunch and dinner. Your employees who understand the economic burdens on your business will readily accept pay cuts. After all, half a loaf of bread is better than none. By implementing this strategic decision, you can save money to run your business even during tough times, such as the coronavirus pandemic.
9. Hire smart workers
The levels of smartness of your employees can also determine how economical your business is. On this subject, you don’t have to use only the experience factor to rate the abilities of your employees. In recruiting new employees, give chances for inexperienced people (recent graduates) provided they are smart enough to fit your work demands. Some workers may not have several years of experience, but they can learn fast once you put them on the job. Hire inexperienced people and pay them entry-level salaries. This way, your business will gain a monetary advantage. Meanwhile, your smart workers will contribute their best to grow your business.
10. Hire interns
The two main types of internships are paid and unpaid internships. Interns are usually students or recent graduates who work for companies in order to gain experience in their chosen field of study. Many times, interns work for experiences, not necessarily for the money. Marketing organizations have been able to achieve their goals by hiring interns from local schools to build their social media marketing campaigns. It is up to you to also understand your business operations, and find out areas that match the skill set of interns. By hiring interns instead of full-time permanent workers, you can cut down your expenses on salary and even office space. When this is done together with telecommuting, you can run a small business by getting tasks accomplished for a fraction of their standard costs.
11. Understand your customers
As technology advances, so do customers evolve with time. When you know your customers’ demographics and behavior on the internet, you can streamline your online marketing campaigns to reach the desired audience. Channel your marketing investments on online platforms that are likely to pay off, instead of spreading your campaigns to several areas on the internet. When you understand your customers’ preferences, responses, and general views about pricing, then you can prepare a reasonable budget and avoid losses. Eliminating ineffective options means that you are in a better position to make wise investments by targeting the right customers.
12. Reward your hard-working profit makers
This may seem controversial, but it makes sense to motivate your workers and customers who bring you the profits. For many successful entrepreneurs, rewards take the forms of good gestures such as the occasional provision of free refreshments, leaves, promotions, and salary increments. Boost the morale of your employees, and they will be encouraged to do more for the business. Offer value-added services and discounts to your regular customers so that you can win their everlasting loyalty. If you invest in the people who bring you profits, you’re nurturing a friendly relationship that will go on to bring extra profits to your business.
To wrap things up, your ability to economize the limited resources at your disposal will determine the growth rate of your organization. The above money-saving tips may be the best ways to build a resilient business that will thrive no matter the business climate.
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