A Guide to Cutting Costs for Your Small Business?
If you have a small business, then you’ll be well aware of the slew of costs involved to run it efficiently. One of the most important costs you have to incur is public liability insurance. You might need it because it protects you and your business from claims initiated by suppliers, customers or the public in general for any mistake on your part.
But you don’t always have to drain yourself out of financial resources while running your small business. Here are some ways in which you can slash your costs:
- Go for a coworking space
Nowadays, coworking spaces are quite in trend, especially for business owners who are just starting up. Instead of hiring a large space for themselves, they go for business premises where resources are shared. This proves extremely economical for companies during their initial days of establishment. Moreover, Wi-Fi, cafeteria, air conditioners and other conveniences are taken care of by the service provider. So, you are spared of the hassle of looking into these aspects.
- Outsource non-core functions
If you have already set up your business, then you may be looking to fill different positions to perform routine operational functions. This can be HR, administration, accounting, payroll, marketing, and so many more. Having an in-house team to perform these functions can prove expensive. This is where you can make the best use of outsourcing services. You can work with a dedicated outsourcing provider who handles all these functions, while you can focus on matters that are urgent and critical.
- Take a look at the perks you are offering
Perks are important for employee retention but you shouldn’t go overboard with them. You should understand that you are just starting and it will take a while for you to see revenue flowing in to support your employees with higher compensation. You need to take a look at how much you are offering to your employees as perks every month. You may want to cut down on festivities, gym memberships and concierge service and consider awarding them with some bonus money instead.
- Check your IT budget
In today’s competitive business world, you simply cannot thrive without leveraging the power of technology. IT has a big role to play in boosting agility in your company and taking it to the heights of success. However, your IT budget will depend on the stage at which your small business is operating and the flow of revenue. If your budget allows, you can invest in a few software tools that reduce manual efforts greatly, meaning you save on staffing cost. You should even consider embracing cloud because you pay only for what you ultimately need and use.
- Know cost-effective marketing
Marketing and advertising have a major role to play in shaping the perception of your company in the market. You need to use the best marketing mix—product, price, place, and promotion—to create the desired impact on the market. You need to identify the best forms of marketing—PR, SEO, SEM, SMM, direct mail, and events—to generate brand awareness and reach people without burning a hole in your pocket. Replace expensive marketing forms with more cost-effective ones to stick to your marketing budget.
- Work with the right vendors
As a small business owner, you will have to pay attention to your vendor relations. However, not every vendor you work with will charge you an ethical price for the services they offer. Some of them may take advantage of your company name and try to quote a higher price. You need to be aware of such parties. Work with trusted vendors who promise to deliver the best quality services for the price they charge. You can even ask for discounts once you build a strong relationship with your regular vendors.
- Get interns to work
Last but certainly not least, you should consider getting some fresh blood into your organisation. There will be many ancillary jobs in your business that can be managed pretty well with the help of interns. You can hire them on the basis of a stipend as per industry standards and create a win-win for both. You get the work done by somebody and that somebody gets to learn about the job as a part of his or her academic curriculum. Hiring interns will also free up time for your full-time employees to do more important tasks.
Cutting down costs lets you focus more on expanding your business because you will be left with enough financial resources for the purpose. It certainly gives you a chance to gain a competitive edge in the market and stand out from the crowd.
