Saving money and cutting costs are the two pillars of success for any business, regardless of size or industry. Without positive sustainable profit margins, a business can crumble even with a promising idea or powerful team behind it. Fortunately, it doesn't take business magnates, like Warren Buffet or Mark Cuban, or economics wizards from Ivy League schools to figure out how to cut expenditures and improve capital leeway. In fact, here are five ways to accomplish that.
Improve Your Hiring Process
A high turnover rate costs money and impedes growth. Interviewing candidates and training them takes not only time but also manpower from your business. For instance, if you run a small startup, your senior software engineers will need to sit in with candidates you are seriously considering, which means hours of them not being on their desk and doing their main responsibilities for the company. Streamline your hiring process by building a good HR department, having a clearly defined job post online, and designing an attractive work environment.
Pay Only For What You Need
It's not a sensible goal to cut all your expenses since many of them are necessary to continue operations. Renting work space, paying for utilities, and paying for insurance premiums every month are all constants in any traditional business setting. If your business runs exclusively online, there are still costs to be incurred, such as monthly web hosting, domain names, etc. Monitor your business' spending habits and ensure that you're only taking unnecessary costs. For instance, if your company is using vehicles to move and deliver goods and supplies, check your coverage regularly. There are many cheap car insurance offers online, but you'll have to invest time and a keen eye on finding them.
Outsource Your Needs
A fairly nascent strategy by small businesses, especially tech startups, nowadays is to outsource small tasks to freelancers and contractors. These professionals are easier to hire and try out without risking much of your capital. You don't pay them a fixed salary, full benefits, or even sick days, and instead establish a pay-as-you-go plan. Make sure to only delegate non-core work tasks that do not interfere with day-to-day operations if deadlines are missed or quality standards are not met. Examples of such outsourceable tasks include content marketing, bookkeeping, payroll, and so forth.
Move Your Bank Accounts
With the new regulations imposed, it's not surprising that banks look to fatten up their revenues by restructuring their services and increasing their fees. Be proactive in avoiding any charges, such as ATM fees, bounced check fees, or late payment fees. Monitor offerings of other banks and switch to those that offer more competitive fees on their services. Regularly monitoring and switching business bank accounts may create unnecessary paperwork, but it also saves you money over time.
Work With Other Businesses
Business-to-business or B2B relationships can be symbiotic if executed correctly. Bartering with other businesses may sound primal but can absolutely save you money. If you need a product or service to supplement your own business' product or service, partner with businesses that sell such product or service and, simultaneously, need the product or service that you are offering. Good relations with other businesses in your industry and location creates benefits that extend beyond short-term money savings. It can also strengthen your brand's reputation and give you financial support in times of dire need.
To be able to save money for your small business, you must first lay the groundwork for such saving strategies to take effect. Identify all your monthly expenses and any future liabilities that you currently have. Check your business' physical and digital infrastructure for any loopholes or leaks that could be bleeding out cash.