Small businesses have a number of challenges that make it hard to make money. Razor thin margins, expensive employee benefits and high competition are common obstacles.
These factors are found in every phase of your business from launch to growth to maturity. You will always be looking to find ways to make more money.
One of the best ways to grow your profits is to cut costs. You usually have to spend money to make money, but cutting costs is a low effort and low cost way to increase your margins.
In this article, we will look at ways to cut your costs but still run a good business.
Use Apps and Software
There are so many time saving services that can all be done by app or online these days that it makes little sense to hire somebody to do some of these things.
Employee time tracking can be done with online software that is accurate and easy to use and will save you money.
Sending invoices, creating a budget, email marketing and resource allocation can all be done thanks to the latest in cloud computing advances.
Rather than have an in house team dedicated to doing these things, you should be using this software which is usually faster, too.
As already mentioned, cloud computing has made a lot of things possible for your small business. Take advantage and send out all your small jobs instead of hiring an agency or keeping a team on staff to do them.
An example is to use a translation service in the country for the language you need translating. Usually, the cost of living is lower there and you can find their service to be a bargain and done just as well as a local company that charges considerably more.
An accounting service is something that costs a fraction of what it would cost to have an accountant on staff. These services are not only inexpensive but can also be done quickly and efficiently.
Hiring a virtual assistant is also a good way to save money, but also time. When your business is small you end up putting a lot of administrative tasks onto your plate. Rather than hire an office manager, you can have a virtual assistant do your scheduling and handle emails and even make phone calls for you.
Use Inbound Marketing
Advertising takes up a big chunk of profits and sometimes doesn’t deliver what you expect.
Traditional advertising is not nearly as effective as inbound marketing and costs far more. Think of inbound marketing as putting out honey to catch ants. They come to you. Where traditional advertising is like trawler fishing. The net just scoops up anything in its path, but not all of the fish are worth keeping.
Inbound marketing is done by blogging, social media marketing, and email marketing. You have an ideal person in your target market that is looking for what it is that your business does.
Maybe you have a food truck or run a construction company. In any case, you can have your ideal customer come to you when you use these techniques. They are more likely to find you and want to use your service than if you are using advertising like radio or TV.
Cut Employee Expenses
Before you downsize your workforce, try cutting some of the costs associated with your employees. If you have your employees travel a lot, try using virtual meetings instead. Yes, sometimes to close a deal you need to be face to face with a client. But, for some other things, you can do just as much by doing conference calls or video chats.
If you usually offer free lunches or some other perk, let them know that it isn’t economically feasible. You can avoid looking like a Grinch by putting it in plain terms that you are trying to stay competitive without letting employees go.
Let Workers Go Remote
Having employees work from home either full time or a day or two a week will cut down on your expenses to maintain an office. If some of your employees have a company car or a mileage benefit, then you will save tons of money on that front alone.
You’ll see your utility costs reduced and can often avoid hiring more employees due to the increase in productivity by people working from home. That time that employees would spend commuting ends up being time they are working when they are home.