In any economy it can be difficult to keep a small business going – but, with the right guidance on balancing the budget, a business can flourish. Here are some efficient ways costs can be cut even in small businesses:
1. Cutting shipping costs
Businesses that ship products to their customers can often be lumbered with substantial shipping costs, especially when dealing with international orders.
It pays for business owners to shop around for the best shipping rates or negotiate better terms. By doing so, not only can you save a substantial amount of money long-term from lower shipping costs, but you can potentially expand the range of places you can send your products to.
Amazon, for example, was able to sell books to 50 US states and 45 countries by the end of their first month of trading.
2.Rewarding customers and employees
It pays for even small businesses to reward loyal customers with discounts on company products or services, and this helps to build relationships with the consumer that will bring the company more profit long-term.
This doesn’t need to be limited to customers – you should also reward employees who are driving company profits. Rewarding profitability encourages more of it and improves the overall work environment.
3. Using open-source software
The overwhelming majority of businesses utilise software for operations at different levels of the business. This can make the workflow more efficient, but can also be very expensive for a small business.
When looking for software to suit different operational requirements, it’s best to also look into free open-source options and compare them with more expensive solutions to see if they meet requirements.
This isn’t just something small businesses take advantage of either, it’s something that large companies such as Yahoo! do too.
4. Cutting maintenance costs
Businesses, both large and small, incur some maintenance costs for different tasks, such as cleaning services or other routine service tasks.
This can accumulate a lot of unnecessary costs. A small business has the advantage of being able to reduce unnecessary services to more infrequent time periods in order to save money (by cutting back on cleaning or other maintenance services, for example).
5. Taking on entry-level recruits
Small companies should take advantage of hiring inexperienced yet still perfectly competent people who they can pay entry-level salaries to. This would apply particularly to younger people, students for example, with newly acquired degrees who can apply their education to the entry-level sector of the business and gain the experience necessary to progress.
Lots of bespoke software engineering companies take on student developers as apprentices in order to save money, as opposed to spending more on a salary for an employee with years of experience.
6. Outsourcing where applicable
Businesses obviously require staff to carry out daily operations to keep the workflow and productivity of the business intact.
Small businesses, however, can also save money by outsourcing some work to independent contractors rather than hiring more full-time employees requiring expensive salaries in the long term.
Amazon, for example, outsources their inventory management while insourcing logistics to provide same day shipping.
7. Bulk purchases
Saving money by buying in bulk is something any business should be taking advantage of – whether it’s for general office supplies or equipment such as computers and peripherals, or products from online suppliers.
Generally speaking, these should be frequently purchased items or frequently used equipment. In addition to bulk buying, a business should compare and contrast different suppliers to find the best prices.