“A financially healthy company is a result of a series of small daily financial wins, not one big moment. Profitability isn’t an event; it’s a habit.”
― Mike Michalowicz, author of Profit First
The first rule of business is to mind your bottom line. Cost-cutting measures are the best way to ensure a healthy profit margin. But if you’re a small, new business, you’re just not going to have the same resources as a bigger or more established company.
You indeed have to spend money to make money. But where should that money be going, and where can you afford to make cuts? Even if you have years of business experience in other roles, it’s a little different when you’re running your own company. Try these tricks to save you money, strengthen your business, and keep growing, while keeping your costs down!
Keep It On The Cloud
The increase of technology in the workplace gives you plenty of options to cut expenses. A quick and straightforward way to save a lot of potential dollars is to keep your servers on a cloud-based system. It means a variety of savings. It cuts down on electricity and can lower the cost of your IT budget, online security, and hardware costs.
There may be some upfront costs while you are setting up, but afterward, you will only incur monthly fees. Shop around for the best service. You’ll want something with round-the-clock support, in case of outages and data corruption. High security is a must, including identity management, access control, and authorization and authentication. The right cloud services can save you hundreds or more in a year, but the wrong cloud service can spell disaster!
Your Website Can Save You Money
The right website can save you a ton of money. Shop around to give your company the best options for security, flexibility, and customer care. Some hosting services are more user-friendly than others. Some can offer a richer range of support on everything from web design templates, to security to personalized widgets allowing you to track data, and get to know your customers. Understanding your customer base is crucial to calibrating your marketing strategies and increasing your conversions.
Outsource When You Can
Another option for cutting costs is to outsource when you can. The most significant money drain on small businesses is often in employee salary. IT and marketing take up a big chunk of your overall costs. As well as cloud services, you can lower your expenses by hiring outside writers and social media marketing teams. Marketing in the age of social media requires continually updating your information and practices. Online security is always a huge undertaking. Outsourcing to companies that specialize means you can focus on keeping the business growing, and you don’t need to pay an ongoing salary.
Try Guerilla Marketing Techniques
Though you might consider outsourcing some of your social media plans, there are plenty of guerilla marketing campaigns you can launch right now, at no, or very low cost to you and the business.
In the first place, remember that data is money. The more information you can collect from your existing customers, the better your business will fare. An active, regularly updated social media presence is the best way to cultivate your clients.
If you’re an online vendor, you should be providing sign-ups for newsletters, as well as social media links. If you’ve got a brick and mortar office, provide incentives to sign up for newsletters, or for following you on your most-used social media. Once you have a social media plan, use it. Host live events on Facebook. Engage Twitter followers by taking advantage of popular hashtags in your area to ask tailored questions. You can even take the opportunity for customers to provide direct feedback through surveys, both online and in person. These marketing techniques familiarize you with your clients, offer a wealth of data for untapped markets, and can help grow your business. All at minimal cost to you.
Use Open Source Software
No matter the industry, your software is essential. It’s also expensive. That’s why an estimated 80% of companies use some open-source software in their infrastructure. No matter if it’s for managing customer data, creating the ultimate in high-def digital media streaming, or simple spreadsheets, free software translates to big savings.
Most non-proprietary software is comprised mainly of volunteers. The community atmosphere means you have dozens and sometimes hundreds of problem-solvers working through glitches, constantly improving, and able to solve your problems, for free, and fast.
Do your research and get to know the limits of the software you’re looking to work with. It can save you thousands upfront and millions later!
Join A Co-Working Space
One of the bigger costs upfront, when you’re starting a business, is the cost of renting office space. It’s true that the popularity of the remote office is helping mitigate some of this cost, but there will be times when a business meeting is necessary, or you’ll need to meet with clients in a space that is not a coffee shop.
Local co-op office spaces are already outfitted with equipment that doesn’t have to come out of your pocket, and you can benefit from the outsourced staffing costs of the on-site administrators and reception. In addition to zero maintenance costs to you, it also provides an unexpected benefit: The shared space makes for great networking!
Get A Good Team Together And Build Loyalty
Speaking of networking. I know we’ve spent a lot of time on the idea of outsourcing. But keeping happy employees is another great way to save money. Go for smaller teams, and keep your experience requirements low. Hiring someone with a few years less experience means you can get them cheaper, and helps cultivate a loyalty culture within the company. Cross-training also ensures that your team members stay flexible, as well as providing more space to grow. Low employee turnover is a great money saver for both large and small businesses.
When you’re starting a small business, or looking to grow, you want to keep costs low. It allows you some wiggle room to adjust your business, without impacting service and quality. There are plenty of ways to cut down, from outsourcing to co-op to social media marketing. This list should help you save money while avoiding the pitfalls of cost-cutting. Better news for you, your customers, and your business!
Keep everything on the cloud
Try Guerilla Marketing tactics
Ensure proper website hosting services
Apply open source software
Join a co-working space
Culitvate a solid loyal team
Outsource tasks when necessary