As the old saying goes, you have to spend money to make money. However, for a small and relatively unknown business, spending too much right away can become a serious problem. As long as you don’t jeopardize the quality of your products or services, cutting corners and cutting costs is the best thing a small business can do. It’s not just about saving money, it’s also a good way to see how tough you are and how far you can stretch your abilities – to cut business costs.
Outsourcing
Nowadays, when most of the work is done online, there’s no need to limit yourself to the employees from your city or area. This means that all of the world’s talent is at your disposal, and you don’t even need to have an actual physical office. The salaries of the remote employees are based on their country’s economy, which usually means that you will get the same quality of work for a much lower price. You can also pay them on a project to project basis, which saves you the money you’d spend on benefits and taxes.
Marketing
Marketing efforts are extremely important for a young company. However, this doesn’t mean that you have to break the bank in order to afford a good campaign. More often than not, marketing campaigns can be organized inexpensively, just by knowing your audience. However, the least expensive tool for advertising – e-mail – can also be the most difficult to use correctly. E-mails allow the customers to take their time and really evaluate your offer. It’s just a matter of finding the people who were interested in your products in the first place and sending them the e-mail at the right time. Here, the balance is the key – too many e-mails or too long e-mails can have an opposite effect.
Storage
For a retailing company, keeping track of storage and always being able to supply the products means staying in business. This also the area where most man-hours, and therefore money, can be saved. Using an elevated work platform provides the employees with a possibility to work efficiently in tight worksites. That way, you will have a maximum workspace available for larger loads. Using high-tech gadgets to keep track of the goods and be informed about running out of a specific product is also a necessity. Not just in order to save money, but your reputation as well.
Cash management
Having a secure cash flow is more important than having a lot of initial capital. This can be accomplished by setting up a few simple rules and sticking to them. For instance, never pay your bills ahead of time and never be late with payments. Set up a few credit lines with different banks even if you don’t plan on using all of them. Sometimes that will imply paying fees for the money you don’t use, but it’s always best to have a plan B if something goes wrong.
Credit card APR
A lot of small businesses use credit cards to pay for larger expenses. Banks treat these credit cards the same way they treat the personal ones, and they charge a pretty steep annual percentage rates. However, the rates can be lowered by simply asking for it. Don’t be afraid to invoke the loyalty card if you’ve been with the bank for a long time. Ask around about the rates in other banks, and make sure to always be a stellar customer. This means never going higher than a 35 percent of the credit limit and always paying on time.
Energy savings for cutting business costs
The biggest expense of running an office isn’t the rent but the energy bills. The best way to tackle this problem is to go green. Using solar panels, not wasting paper, organizing car pools or simply using double pane windows will not only save you money, but also create a corporative culture that cares about the environmental issues. This is both a responsible thing to do and a good marketing strategy to have. A business mission that goes beyond simply making a profit can really make you popular in your community, especially among your civic-minded customers.
Small businesses need to save all the money they can. By being responsible and taking advantage of business opportunities when they present themselves, a small business can save a significant amount of money and get through a rough start more comfortably.
What do you think?
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