Whether you’re about to launch your first startup, or you already run a small business, day to day operational costs can be extortionate if you’re not careful. Many small business owners have to watch the pennies, so managing your finances and looking at ways to keep business costs down is crucial.
Money may be tight if you’re in the early stages of setting up your business, so here are 8 effective ways to keep costs down for your small business.
Review Your Expenses
Your first step to saving money in your small business is by reviewing your expenses. Thoroughly analysing every area of your business and tracking what you’re spending money on can help you come up with strategies to reduce business costs. Your business plan should outline the A-Z of your finances, which can point you in the right direction on areas for improvement.
More and more small businesses and startups are understanding the importance of being eco-friendly. We all know how serious climate change is, so doing your bit to help the environment and implementing eco-friendly tactics into your business operation can be another great way to keep costs down. Whether you run an office, home-based business, or storefront, there are lots of changes you can make, such as investing in LED lightbulbs, ensuring all equipment is turned off once the day is done, as well as going paperless.
If you have noticed an increase in your gas, electricity, and water bill, you may want to consider changing supplier. Switching water supplier is one people often forget about, but it’s easier than you might think. You can switch directly with the likes of Business Stream – they were the original commercial water supplier created when the market first deregulated, allowing switching in the first place. Or, if you want to consider your options, you could approach a third-party broker, or consider consolidating your water with other utilities and telecoms.
Increase Employee Recognition
If you have other people working for your small business, it’s vital that you understand the importance of employee recognition. If your team aren’t happy and content in their role, you not only face the risk of them being underproductive, but them going elsewhere for employment. The less productive and efficient your team are, the more money you will lose for your company, so communicating effectively with your staff, handing out incentives and rewards for their hard work, and showing your appreciation for their hard work will pay off.
Buy Second Hand
For those who are about to launch a startup, you may need to purchase office equipment and furniture to get up and running. If you’re on a tight budget, splashing out on the latest mod-cons may be the last thing on your mind, so why not go second hand instead? There are plenty of online resources and companies like eBay where you can find second-hand items that work as good as new. Buying second hand will not only get you more for your money but help the environment too.
Use Social Media for Marketing
For consumers to be aware of your small business, you’re going to need to market and promote your brand. While many businesses splurge out on newspaper columns and television advertisements, you may not have the funds to cover the costs for these services. Thanks to advances in technology, social media can be a great platform to spread the word of your business. Creating a business page on social media platforms like Facebook is free to do and can help you connect with your audience and expose your products or services to over 2 billion people.
If you’re just starting out with your business, you may struggle to find consistent work. If you’re hesitant about employing people in your company at first, you may want to consider hiring freelancers instead. There are fewer responsibilities attached to hiring a freelancer, and if work goes quiet, you won’t have to worry about paying monthly wages.
Be More Efficient with Space
Many small businesses need to rent office space in order to house all their staff, equipment, and software. If you fall into this category, being more efficient with your space can help you make the most out of your situation. For example, creating multipurpose rooms can keep costs down, such as by using your break room for conferences too. You can also look into collaborative workstations and sharing your workspace with other businesses, meaning you won’t have to pay as much rent for your office space.
For your small business to thrive, you’re going to need to make use of all the strategies listed above and put them into practice, helping to cut down costs. Without balancing your books, your business will fail, so doing everything you can to boost sales, increase revenue, and spend within your means is key.