Starting your small business can be a stressful experience to begin with, but it only gets harder if you need to worry about the costs of your business more heavily as well. Most businesses will fail within their first five years of operation, but this doesn’t have to be your business.
There are ways to cut costs and keep your business lean without sacrificing what makes it great (or exhaust yourself trying to do too much making up for it). Here are a few of the main ones you should consider:
1. Consider the Services You Use
Many businesses might have small subscriptions that add up and services that might have been useful at one time but are now no longer used. An audit of those services might give you some great information:
Review the following and see where you can cut expenses:
- Your utilities and services such as internet connections, phone plans, etc. While mostly necessary, you might be able to switch providers and get a good deal.
- Any online subscriptions and services perhaps related to marketing or maintaining a website. While also all useful, you might be able to bundle these services together with a good provider.
- Any industry specific services you might use that you can either get more infrequently or find a better competitor. If you’re feeling ambitious and it is possible, see if you can get such things taken care of in-house.
The answers for this strategy will vary depending on what you need and use, but you can always look for a better deal elsewhere and a little bit of effort can yield hundreds of dollars of savings per year.
2. Consolidate Tasks Whenever Possible
Planning on taking several trips out on the town to run business errands? Take one trip and get all of them taken care of at once. Looking to get some logos designed, and plan to have more design work done in the nearfuture? Try to have everything prepared at once and see if you can get a discount. Organization will be key, as well as taking input from your staff on what takes up most of their time.
Ultimately, this strategy entails striving to improve efficiency in your business overall whenever possible and foster a value of simplicity. It is a mindset you can develop over time as. Keep your mind fresh and try to look at your business operations from the outside, to develop new methods to cut costs.
3. Consider Remote and Freelance Help
Staffing can be incredibly expensive, and keeping some people on payroll to perform a few specific functions can drain the accounts very quickly. While you do need to keep good people on your team, should your business be more than just a one-owner operation, you also don’t need to have extremely talented (and expensive) people performing basic tasks.
And unless it involves physically stocking shelves or working, you likely don’t need to have staff in the same space as you. Remote and freelance workers are a great option, allowing you access to the best staff for the job at a competitive price, and your overhead and training costs will likely be minimized. Consider what jobs and tasks your business can outsource, and you will be able to save money.
4. Focus on Value When Making Purchases
Some business owners might try to keep costs low by trying to find the most inexpensive items of the market with which to conduct business, or at the very least not getting the best available. While you likely don’t need the absolute best, it is in your interest to get products that you get the most value from. A cheap tool is no good if you have to replace it a few times within six months.
For a general and highly simplified example, let’s consider a desktop computer. You can either invest in a $1000 computer that might last two years or a $2000 model that can last five with a bit of maintenance. Over time the more expensive short-term model is the better buy, and if it’s a high-use item the better user experience and speed will also improve productivity, increasing its value.
5. Reconsider Your Location
While your location might mean everything depending on your industry (and if this is the case, please ignore this strategy and focus on cutting costs elsewhere), with the improvements in communications technology it is very easy for many businesses to be ran from an office out of the way (with rent to match) or even from home, as is the case for many creatives.
Renting office space or a storefront (with all its associated furniture) is, perhaps outside of labor costs, the most expensive part of running a business. Consider who you expect to be your customers, also consider the location-dependency of your work. Are you better off trying the online market for your goods? Do you need to meet your clients in person, and would meeting at a coffee shop or other nice location be enough for those rare times that you do need to meet? The answers to these questions can guide you to saving a lot of money each year.
Conclusion
Your business is unique, and as such, the ways in which you are able to cut costs will be unique as well. Yet there are a few common threads mentioned above every owner can consider, and you should take advantage of every opportunity that comes your way. Every dollar you save is a dollar that can invest elsewhere, ensuring your future success.
Consider what methods you use and what methods businesses similar to yours use, and don’t be afraid to ask around. This list is by no means exhaustive and we encourage you to engage in the small business community.
About the author: Kevin Conner is the founder and CEO of Vast Bridges, a customer acquisition and lead generation company in the home services arena. Most recently he and a small team have launched broadbandsearch.net, the U.S.’s leading home services (broadband and TV) search engine.
