Theoretical advice on how to cut costs while running a business is great to hear. It is easy to give tips or ideas on how a business should run to save on operation costs. But small business owners who are struggling to keep things going will appreciate real help from those in the same situation. So here are some options with real-world examples of companies who succeeded in their business goals while effectively cutting costs and saving money.
Opt for Low-Cost Advertising Alternatives
Advertising is a significant expense for most companies, regardless of the size. But there are several low-cost alternatives to traditional advertising methods. Choosing to cut costs on expensive advertising costs is a popular move for small to medium scale businesses as more options in internet marketing open up. Presently, it is possible to reach out to customers without spending more.
Public relations is a more cost-effective and efficient type of marketing. Some companies that tried and succeeded are Meeting Wave and BigTime Wireless. These companies ceased the use of paid advertising and opted for inbound marketing. You can also explore SEO techniques on your company website and other social media sites to boost traffic.
Have Sponsored Events
Sponsoring local events can be money well spent. Many businesses utilize scheduled events, such as galas and seminars to grow their client base. You can have these events sponsored to carry the expense weight in exchange for some advertising deals during the event.
If the two businesses are in the same industries or have a similar audience, it’s usually a fair deal for both. Sponsored events can also be used to promote a new product and boost sales. Take the example of Xactly, the software and services company for sales performance management. Their presence in sponsored events has a significant impact on their business growth, and they’ve realized cost-efficient benefits from it.
Learn to Negotiate
Negotiation is not just for buying your next car or for purchasing an expensive appliance. Negotiation can open doors to better deals with suppliers, distributors, employees, and vendors. By negotiating favorable terms in business transactions, you’ll be able to save money over the long run.
For example, take the case of Online Business Specialists. This company specializes in online marketing and provides a wide range of services to cover all aspects of digital media. Most of their clients are small businesses that have limited resources. By negotiating favorable rates with their distributors, they were able to offer low rates that fit into the budget constraints of most small businesses.
Lean Toward Cloud-Based Solutions
Cloud-based solutions are more cost-effective for small businesses that are just starting. Cloud-based technology comes in software as a service (SaaS) and other value-added services. With cloud tech, you can cut down on hardware costs while obtaining tech support from the provider.
Meeting Wave’s Boyd avoids the expense of high-end equipment by using cloud-based solutions to store data. “Rather than purchasing and maintaining expensive software in-house, we use Salesforce, PayCycle, and Staffmate where we pay per yearly user rather than having to purchase and maintain costly software,” says Bibby Gignilliat of Parties that Cook.
Being able to outsource is another money-saving tip that every small business should consider. You can outsource accounting, customer support, social media marketing, and more. The idea of outsourcing some functions in the company opens up possibilities of hiring better talent for hard-to-fill positions while remaining cost-effective with payroll expenses.
For example, companies outsource because it is possible to access more qualified workers than those they could hire for the same amount of money. Employers also save on office space, training, and equipment costs since these expenses can be passed onto the contracted company.
If you’re looking for ways to cut down on cost while maintaining productivity, telecommuting is one of the most cost-effective options to consider. When your employees can work from home, it will help reduce your office space requirements. It has also been reported that telecommuters are more productive since they can cut down on commute time and avoid disruptions in their daily routine.
Keeping things online allows small firms like Pascale’s to avoid the expense of office space and recurring operational expenditures while focusing on production. Find a technique to convert at least some of your employees to telecommuting if you cannot make the entire workforce telecommute.
Cut Down on Expenses, Not on Employees
It’s not uncommon for small business owners to cut down on employees to save money. However, this is not always the best solution. Your employees are your greatest asset, and cutting them may lead to lower profits. Instead of laying off people, look for more minor ways to reduce your operating costs.
Although it’s tempting to shut the doors when that cash flow gets low, as it does in small firms, don’t give up hope of obtaining what you need. Consider the age-old practice of bartering and offering x-deals. When an interior design firm needed to renovate its office, Pascale employed bartering by providing PR services in exchange for work. Just as with any negotiation, the worst response you can get is a simple no, and you may be surprised by how promptly you’ll hear a yes.
Go Green and Save
One of the great things to do for your business is to go green. Doing so will not only reduce your carbon footprint but can also help you save money. You can start by recycling all company waste like paper, plastics, glass, and aluminum cans. At the same time, you should consider getting solar panels for your office roof. Not only can you save money on your energy bills, but you’ll also get to brag about being green.
There are many ways to save money in the long run, no matter how big or small your firm is. For example, you can avoid wasting time on lengthy processes by simply creating a simple system that enables all employees to be engaged in their work without going through several steps. Up-to-date technology is another way to keep things fast and efficient.
Take a look at your company’s distribution process and see what you may do to make it simpler or eliminate steps. Concentrate on your company’s strengths and negotiate beneficial partnerships to keep it growing.
There are many financial techniques to keep a small business running, and these ten steps should help you save time and money as you go along.