Money is always going to be a big consideration when it comes to running a business, no matter what size it might be. However, when you run a small business, the difference of a few dollars can be the difference between success and failure, and that means looking for as many money-saving techniques as possible is a crucial part of your job.
Money can often be tight in a small business, but that doesn’t mean that, with some good money management and an understanding of how to save money where possible, you can’t still create a successful business that grows and thrives. With that in mind, here are some excellent money-saving tips to help you get started.
Initially, the idea of outsourcing might not be something that a business owner finds all that appealing. After all, not only will you be paying for someone to take on this work, but you’ll also be relinquishing some control over the work itself. This can be unsettling and a concern for small business owners, especially if they are the only ones working in their business.
However, although there is a cost involved, this should be seen as an investment, not a loss. The time saved through outsourcing is time you can use to work on other parts of your business. For example, if you outsource your accounting needs, you can then focus on marketing and sales. You can focus on IT or content creation if you outsource your marketing. As a small business owner, especially a sole trader, you’ll have a lot to do and not enough time to get it done; outsourcing is the answer, and if you choose the right partner and use your spare time effectively, you should be able to recoup any costs through sales.
Understand Your Finances
Whether you choose to outsource your accounting needs or not, you must understand your own business finances. You need to know what your profit and loss statement means and what actions you should take to improve (if that is required). You need to know what depreciation means and how that can affect your income. The basics of taxation is another useful piece of knowledge, and so on.
Depending on how much of the accounting side of things you take on yourself, you’ll need to know either more or less, but you’ll always need to know something. If you don’t understand whether or not you’re at least making a profit when it comes to pricing your products and services, you won’t be able to guarantee good business growth, and you might make a mistake that leads to a big financial problem in the future.
Negotiate With Vendors
Being a small business owner counts every penny for making savings. This is why it’s crucial to negotiate with your vendors, even if you already think you’re getting a great price. It might be that you could save even more money, and if that is only a small amount, it’s still better than nothing.
The truth is that the majority of business owners won’t negotiate. They might shop around – and this is certainly good practice – but when they find a price they’re happy with, they’ll accept it, no questions asked. This could be where you’re making a mistake that is costing your business money.
If you’re not comfortable when it comes to negotiating, it’s time to learn how to do it well. It’s an integral part of business, and if you want to be successful, you have to understand how it works and how to do it. One way to get started is to get a number of different quotes from a variety of suppliers. Once you have them, you can use them as leverage with the supplier you particularly want to work with (assuming the other quotes are lower, of course). Tell them that you want to buy from them but that you have a better deal elsewhere; it might be that they are able to lower their prices to match or even improve on the other price. If they won’t or can’t, the choice is yours whether to use them or not, and you’ll need to consider their positive points and weigh them up against the higher cost.
Embrace Remote Working
Some business owners find the idea of allowing their employees to work remotely to be a worrying prospect. For example, they might worry that they will have less productive workers or that morale might fall. Working from home is said to make people more productive because they are more comfortable and relaxed. Morale can be increased because you offer flexibility and show that you care about your employees’ mental and emotional health.
If you want to ensure remote working is successful, you’ll need to provide the right tools so people can do it well. This means setting up collaboration software, for example, and potentially supplying office equipment. However, although this will incur an upfront cost, the fact that you don’t have to pay for an office and that your team will work harder means that you can save a lot of money in the long term.
Hire The Right People
It doesn’t matter if you’ve got a large team working for you or you’re just about to hire your first employee, and the fact is that if you choose the right people, your business will be more successful, and you’ll save money (and make money at the same time).
Hiring the best people for the job will cost you money because you have to pay the salary they are expecting (perhaps more if you want to ensure they stay with you) as well as the benefits you need to offer. However, if you make a smart hiring choice, you should find that these costs are easily paid for through the employee’s work.
Not only that, but you’ll have to spend less on training (although some training, such as health and safety, is still going to be needed), and you can delegate larger tasks and projects without any concerns.
In business, sometimes it is a case of spending money to make money, and when it comes to hiring people, looking for skills and experience is the key.