Looking for simple ways to cut costs? These tips will help you make a noticeable difference to your bottom line.
1. Reduce staff costs
Without a doubt, having someone to help deal with routine tasks can greatly improve productivity. The rub is that hired help is often too expensive for small business owners.
Internships can be a real win-win: a student gets hands-on experience assisting you with marketing, accounting or administrative work and you get time-saving help for free.
A qualified remote worker is another cost-effective way to bring on some much needed support for administrative tasks.
2. Think thin
Small business owners are often advised to trim down their offerings to a niche market. You can save money by applying that same thinking to how you do business.
For instance, subcontracting can allow a service-based business owner to keep a narrow focus on the work they do, while attracting more customers. Taking on more work and paying someone to do it at a lower rate than you charge your clients will increase capacity and your bottom line – while maintaining your focus on what you do best.
3. Network more
Forget expensive print ads and direct mail campaigns. You can save a ton of money getting the word out about your business by connecting directly with your target market:
- Co-host an event with a business owner whose customers will be interested in what you do.
- Connect with your local Chamber of Commerce.
- Attend business networking referral events.
- Run a contest on social media.
- Sponsor a community fundraiser.
Networking at trade shows and industry events is another great way to meet potential partners and customers, without breaking the bank on costly advertising fees.
4. Embrace co-opetition
Often businesses buy in bulk to save money. Unfortunately, purchasing in volume can backfire if you’re struggling to maintain positive cash flow, and the cheap supplies you bought never get used.
A better strategy is to only buy what you need and to share costs with other small business owners. Co-opetition is becoming a buzzword for good reason. Forming alliances with businesses can lead to lucrative partnerships while collectively saving everyone some cash.
5. Save time with technology
If you haven’t yet made the leap, adopt cloud-based software to improve operational efficiency. Try free collaboration tools like Google Drive – also a great way to cut down on the cost of paper. Use virtual meeting technology to save a small fortune on travel costs when connecting with clients in different time zones. And do a free trial of accounting software to see how automating routine tasks like invoicing and payroll can improve accuracy and free up hours from your schedule.
Review your business expenses on a regular basis to track rising costs and to find more ways to reduce unnecessary spending.
A few final – and costly – pitfalls for busy small business owners to avoid:
- Always pay vendors and lenders on time to dodge late fees, interest and a poor credit rating.
- Shop around for the best deals on everything from software and financial services to office supplies and inventory.
- Hold off on renting space for as long as possible. Encourage staff to work remotely, meet clients in coffee shops and remember: home office space is an eligible tax write off.
What will you do differently to start cutting costs for your small business today?
Contact the Maddock’s Accounting & Advisory team here to find out how we can help.