A Small Business Owner’s Guide to Keeping Costs in Check
— Guest post from Katie Conroy —
Starting a small business is exciting, but it can also be intimidating. Unfortunately, poor financial planning is one of the most prominent reasons for small business closures within the first year, but there are strategies you can implement to prevent this in future with a bit of planning and endeavour.
Make Organisational Changes
Poor business practices lead to inefficiencies and drive up costs. To keep expenses in check, follow these steps:
- Review Financial Statements: by reviewing the recent financial statements, you’ll be able to identify areas where resources are being overspent. Create a new plan to utilize these resources for areas with the best performance.
- Utilise Free Software: as Techvera reports, operational inefficiencies can be reduced by leveraging software in underperforming business areas. For instance, use a free invoice maker to generate an invoice that can automatically be shared with clients post-sale, leading to faster payments.
- Resize Your Team: if you have overstaffed departments, it’s important to make the tough decision to cut back on staff to secure the future of the business.
- Hire a Specialist: use a specialist recruitment service like Softest Consulting Services Ltd if you need to fill a specific role within your technology team. We have a pool of very experienced candidate available within our circles.
Reduce Cost of Services
If you’ve never negotiated prices with service providers, you are likely overpaying. Here are three main providers you should plan to negotiate with:
- Leasing Company: if your office lease is up for renewal, negotiate for lower monthly payments. If you cannot reach an agreement, find a cheaper lease elsewhere or use an office sharing space. This will instantly reduce monthly expenses by the thousands.
- Credit Card Provider: according to CNET, by using the card regularly and being punctual in payment, you’ll enter the good books of credit card providers. Use this as leverage to increase your monthly limits, reduce lower annual fees and ask for exemption from penalties in case of late payments.
- Payroll Services: although you may not have much wiggle room with your payroll company’s fees, you can choose to cut ties and manage payroll on your own. This change may sound intimidating, but there are actually plenty of user-friendly free or low cost money management apps that can do the job and save you money.
Implement Cost-Effective Strategies
If business debt is racking up by the day, the following strategies will reduce costs drastically:
- Start Working Remotely: not paying rent will allow you to save thousands of dollars yearly which can be used towards covering other expenses and growth projects. Plus, if you upgrade your home to better accommodate your working environment, those changes may increase your home’s value.
- Leverage Content Marketing: Instead of spending thousands on performance marketing campaigns, adopt a content marketing approach that utilises free channels such as social media, blogs, and emails to grow your business.
- Use Infographics: as part of your marketing approach, create your own infographic package to share on your website and social media accounts.
- Go Back to School: Consider improving your financial planning and cost-effective strategies by earning a business degree online.
Find Ways to Cut Back
It is important to learn how to keep your business moving forward in sustainable ways. By implementing these strategies, new small business owners are bound to experience a dip in costs and an increase in overall efficiency, which can make a huge difference. Take a close look at your finances and decide where you can cut back, renegotiate, or re-strategise to be more cost efficient.
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