One of the main concerns for any small business is in keeping costs low enough to realize a profit. After all, they are in business to make money. Unfortunately, if most of it is being paid out, then profits suffer as a result. Not only would you like to survive, but you want to grow your business as well. Actually, there are ways to cut costs so that you can realize a profit year after year. Here are just five money-saving tips to help you grow that bottom line.
1. Seek Alternatives to Expensive Advertising
It is commonly known that advertising online is so much less expensive than buying air time on television or radio. Then there is print advertising that can also run up quite a tab. However, don’t be lulled into a false sense of security when seeking traditional online advertising such as paying for those highly competitive Google AdWords along with other forms of paid online advertising. Some small businesses produce YouTube videos, of which instructional videos are the most in demand. Many businesses shoot amazing videos with nothing more than a digital camera and it costs nothing to post those videos online. Videos also serve to give a face to your brand and are a super cost-effective way to build rapport with your audience base of potential customers.
2. Let the 3 Rs of Conservation Work for You
Often referred to as the 3 Rs of conservation, you’d be surprised at just how much money you can save if you, “Reduce, Reuse and Recycle”. Imagine how much money you can save if you reduce what you are paying for electricity, for example. Start by learning how to cut costs by unplugging everything not in use at the end of the day and also invest in low energy consumption appliances. Change out any incandescent lightbulbs still in use for energy-efficient LEDs. Reduce the amount of paper you are buying by converting to digital files and forms of communication. Reuse whatever you can so that there is no need to buy something which you really don’t need. Conserve, conserve, conserve.
3. Outsource Wherever Possible
Outsourcing work is another way to realize a huge reduction in outlay. One good example might be your HR department. How many jobs would be required to do everything from recruitment to termination and everything in between? Outsourced HR services like G&A Partners can cost significantly less than paying an entire department’s wages and, in the process, you can be reducing many resources you are now paying for. Imagine the cost of electricity used for a Human Resources office and what it costs to buy technology and other items needed in day-to-day operations. While outsourced HR services can indeed save you a ton of money, you should also understand that this doesn’t always work in all departments and for all jobs. You can’t, after all, outsource your engineering department if they are developing the products you manufacture. The bottom line is to outsource wherever it’s logical to do so.
4. Find Alternatives to High-Interest Loans
Sometimes you might find that you have a cash flow problem and so you turn to what you feel would be a quick way to come up with enough capital to meet your current needs. Have you taken the time to do a few calculations to understand what the ultimate cost might be? Quick, high-interest loans are probably not the best way to get money in the coffers. Some small businesses sell shares while others explore the benefits of invoice discounting or invoice factoring. There are a number of other ways to get money moving again but high-interest business loans are not always as effective as you might assume. You may also be able to qualify for a low-interest loan found through organizations like the SBA, or Small Business Administration. They may have links to lenders catering to small businesses like yours.
5. Offer Flex Work to Offset High Operating Costs
It is becoming more and more common for workers to work at least part of the time from a home office. There are several ways in which this can help to cut costs for you, but the obvious main benefit is in the reduction of operating costs such as utilities. As mentioned above, conservation is big on the list of money-saving strategies but today’s workers will also be amenable to working from home as much as possible. This saves them money as well! Bear in mind that keeping employees happy keeps them coming in day after day. They are content to work from home, you are more than happy to reduce operating costs and then there is an added bonus you might not have considered. Keeping your workforce on the job year after year also helps to reduce what you’d be spending training new employees. If you are truly curious as to just how desirable flex work schedules are to today’s workforce, send out a survey. You just might be surprised at the results when tallied up.
It’s Time to Mix and Match
Any one of these money saving tips can help you grow your small business but, when combined, you will probably see a huge difference in your annual profits. Yes, outsourced HR was mentioned, but there are other outsourced services which can be utilized as well. You might want to consider outsourcing:
- Customer Service
- Shipping & Warehousing
These are just a few of the options you might want to explore. Sometimes businesses outsource manufacturing and other times they outsource local delivery services. Quite often you find that by making changes in one area, you are opening the door to cut costs in other departments or procedures.
When all is said and done, you should remember the old adage, “A penny saved is a penny earned.” Are you looking to grow your small business? Then save all those pennies to increase your earning power. Sometimes it is just as easy as that.