Cutting costs and saving money are two of the most powerful ways to keep your small business’ finances in good shape. If you’re wondering where and how to begin doing that, don’t worry, because I’ve got a few tips that can help you out.
Some business owners believe that the only way their business’ finances will improve is with an increase in revenue. Improved earnings are certainly something to aim for, but it’s not the consideration here. It won’t be of much help if a chunk of your income disappears into an ever-growing black hole of other expenses and wastage.
By implementing the following 5 easy tips you can start saving money for your small business:
1. Draw up A Budget and Pay Attention To Expenses
If you haven't been budgeting for your business then it’s about time. Start with a monthly budget, and if you feel up to the task, you can also consider weekly and yearly budgets. If you’re new to drawing one up, go easy on yourself and keep it relatively simple.
A monthly budget should provide you with enough meaningful information to get you started, plus you can make adjustments along the way.
Create a simple budget by following these steps:
- List your sources of income
- List your fixed costs
- List your variable expenses
- Try to determine one-off costs
Take note of where your biggest spending happens.
You may not be able to do much about the amount of rent you pay, but you’re likely to find expenses that can be reduced or cut altogether. For example, if you notice that your monthly energy bills are higher than they ought to be for a business of your size, look at ways to reduce energy consumption.
2. Save Time and Money with an Accounting Software
If you are still doing your business’ accounting in old-fashioned ledgers or using printed pages stored in files, then you are not being productive and spending time where you shouldn’t. It’s a time-consuming and costly exercise. Save time and money for your small business by using accounting software.
Most of the software suitable for small businesses requires little more than for you to input the numbers and hit the enter key. If accounting is not your forte, the software can make it easier for you, although you still may need the services of an accountant once in a while. Having the right accounting software for your business with spending and accounting automation will make your work easier and can keep your financial record safe and updated.
Everything can be stored on your computer and on backup drives, which means you’ll have less need for physical storage space, and you’ll use less stationery. The savings may seem relatively insignificant initially, but they do add up over time.
3. Reduce Employee Meetings
Employee meetings are a great way to waste money. Consider how many workers attend meetings regularly, and then calculate how much money you’re paying them to sit in a room and be unproductive. Then work out how much money you pay them to attend meetings in a month and year. The results are sure to surprise you. Add in tea, coffee and water and your costs can skyrocket.
Let’s face it. A great deal of what gets said over several hours in a meeting could be said more effectively and succinctly in an email.
I’m not saying that you never need to have meetings. If you meet with employees to share information and get feedback, provide them with an agenda or the information itself ahead of time. This will give them the opportunity to take the information on board and prepare their responses.
By cutting down the number of employee meetings you have, as well as on the duration of those meetings, your workers can do what you pay them to do, which is to work. That, in turn, will hopefully lead to more sales or services rendered to customers.
4. Handle Your Own Marketing and Promotion
Looking after your marketing and promotion will be time-consuming, but it will save your business a considerable sum of money. A few decades ago, getting professional marketers to do the job may have been unavoidable, but times have changed.
There are various tools and channels that make running your own marketing campaigns easy and affordable, and some are even free. Make use of them, but don’t forget about the power and potential of networking and word-of-mouth advertising. A few easy ways in which you can handle the marketing of your business include:
- Build a website that’s engaging, memorable, mobile-compatible and user-friendly
- Inform and engage with your customers via email
- Guest post on established blogs around your industry
- Become a guest relevant podcasts and share tips and the story behind your business
- Make use of digital marketing campaigns and competitions
- Build your audience and engage with customers on social media – focus on the platforms that best suit your business, such as Facebook and/or Instagram
5. Outsource To Save Money
Some tasks or work may need to be done so infrequently that hiring full-time staff would be an unnecessary expense. You would end up paying that employee a monthly salary and possibly benefits as well, then realistically, you may only need them a few days out of every month.
If you outsource the work as and when needed, it becomes an occasional expense. Rather than finding a new person to do the job every time you outsource, try to work with the same person, provided they did a satisfactory job the first time around. That way, they will become familiar with your business, the way you work, and the work they need to do.
There are several places where you can find freelancers to hire including Fiverr, Upwork as well as searching on Google and LinkedIn
Implement What You Can Immediately
A few of these tips may take some time to implement, while others can be actioned immediately. If you can get started on any of them as soon as possible, do so for the sake of your business. Then, put the rest of them into practice whenever you can.
These aren’t the only ways in which you can save money, but they can get you off to a good start and cut costs in a significant way.