A successful business is one where every dollar is used in the most productive manner. When you are setting up a small business, you cannot afford to ignore how the cash is flowing through the firm. If you do that, the risk is that you will not have enough funds to address critical expenses that crop up.
While some expenses are unavoidable, there are ways to keep costs within budget almost every department. Here are some ideas you can use to save money in your small business:
Home office vs rented space
One of the biggest expense heads for you is your office space. If you rent out office space, you will be paying a huge sum towards this every month. A simple way to cut down this cost is to use your own home as your office space. If you have a portion of the home that you convert into an office, you cut down the rent costs, which are significant. For a start-up in initial stages, even one portion of a large living room can do as an office if you can work without interruptions. If you have a garage or outhouse, that can do very well too.
If you do have to rent out office space, make sure you do not take on far more space than you need. With good design, you can use up every inch of a fairly compact space and save money on rent.
Keep your employees to a minimum
There are quite a few tasks that you can carry out on your own with the help of technology these days. For example, accounting, payroll management, employee scheduling etc. Instead of hiring full-time employees for these tasks, just get the right apps to handle these jobs. Voila! You have better control over the processes and save money on salaries.
Another way to save money on salaries is to avoid taking on full time employees and hire consultants as and when needed. For example, use software to maintain your books efficiently and at tax time, hire an accountant/ tax advisor to file your tax.
Outsource to the experts
Hiring consultants is not the only way to save on salaries. You can also hire independent contractors for a slew of jobs that you traditionally expect to have employees doing. For example, if you have a design/ construction firm, you can outsource the procurement to experts. That way, you get expert assistance on getting the right materials. You also get the advantage of their professional contacts and great pricing thanks to their existing relationships with suppliers. You save money twice over. Once on salaries and once by way of savings on the materials bills.
Marketing is an essential expense that you cannot cut out but you can play it smart and keep costs within reason. Use social media extensively to spread the word about your business. Have accounts on all popular platforms and engage with your audience continuously to keep your brand front and center in their minds. That’s one budget friendly way to spread the word about your brand to a vast audience.
Another cost effective advertising idea is to combine your ads with other material you send out. For example, when you send out invoices, you could add brochures along with them. When you send a quote, you can also advertise other, related services you offer. When you ship products to customers, add flyers with the package.
Cutting costs with office supplies
Office supplies can be a surprisingly large expense head, depending on the kind of business you run. Pay special attention to where you can cut costs here. There is quite a lot you can do. For example, use refilled cartridges for printers. Run printers on draft mode when you are printing out forms for in- office use or better yet, DON’T print at all and send by email. Use recycled paper wherever you can and Go Green while saving money. Instead of buying the typical forms (for example, sales queries, customer details) or getting them printed for you, download them from websites online. Avoid investing heavily in office equipment that may see infrequent use. Hire instead when there is a need or if you have to buy, consider buying used equipment.
Where you CANNOT cut costs
The one area where you do not want to skimp is when it comes to risk protection for your firm. Small business owners often take the general liability insurance but ignoring another crucial type of cover. Professional liability cover or errors and omission insurance is essential for any business that offers a service. This insurance protects you from claims by disgruntled clients.
What happens in event a client files a lawsuit against you for:
- Ineffective service
- delayed service
- poor quality service
- inaccurate advice
Many small business owners balk at the massive cost that a legal battle involves. This fear makes them settle out of court, paying up massive amounts to the client. But your reputation is tarnished by such lawsuits. With a Professional liability cover protecting your business, you can fight this lawsuit in court and establish your innocence. This kind of insurance covers your court fees, lawyer fees, other legal expenses, and damages. To know more about how this insurance works, visit bizinsure.com.
To sum up, saving on business expenses is definitely a smart move for any savvy business owner. However, you should also keep in mind that essential costs like insurance should not be compromised upon.