6 Ways Through Which Small Businesses Can Cut Costs
Over 60% of small businesses in Australia fail within the first three years of operation.
This is attributable to several factors, with cash flow issues being responsible for 44% of all businesses that fail.
Indeed, without enough cash for inventory, salaries and wages and other operational costs, your business is bound to come to a grinding halt.
Aside from sound financial management and planning, finding avenues to make savings, no matter how minimal can go a long way in helping to keep your business afloat.
Here are some ways to help you cut costs, and a result, increase the amount of cash you have to run your business.
- Use Technology
Technology allows you to automate functions affordably in ways that were unimaginable just a few years ago.
For example, if you need 24/7 customer support, a chatbox can be just as effective as a human employee and will cost your business much less in the long term.
Teleconferencing can also help you make savings on travel costs if you or your staff members are required to go to far-flung places.
On matters of technology and software, you can still cut costs by taking advantage of free trials and long-term subscriptions.
- Market Online
The costs of digital marketing are significantly low as compared to more traditional marketing methods.
You can start small with social media marketing, a business blog and other online advertising methods.
This mode of marketing should not only be more cost-effective but should also have relatively fast results.
- Track Your Expenditure
Understanding where your money goes is vital in helping you identify areas where your business is hemorrhaging money. This clarity allows you to make restorative measures.
For businesses with fleets, for example, fuel cards come in handy in helping track and manage your fuel costs. However, this will be as effective as the fuel card you choose.
It would be prudent to use a fuel Card comparison tool to help you identify the best cards in the market.
- Shop Around
You will be surprised at how much you can make in savings over time, by taking the time to shop around for business services before committing yourself.
The best way to go about this is to highlight everything you need in a product or service beforehand, then identify a provider that closely provides what you need at the best rates.
In addition, keep in mind that everything is negotiable in business. Negotiate prices and deals to ensure your business gets the best deals in the market. Shopping in bulk also accords you more room to negotiate and can allow you to get significant discounts.
As much as possible, look to buy in bulk to take advantage of this.
- Reduce Credit Card Debt
While business credit cards are useful in helping you reduce immediate business costs, they come with other fees and interest rates.
These are additional costs to your business.
Reducing this debt will reduce your business costs and make your business more financially healthy over time.
- Approach Your Staffing Needs creatively
There are numerous ways to ensure you minimize your wage bill.
Allowing remote working is one of them. Not only do employees love the convenience of working from home, but also, studies have shown that employees are willing to take less pay with the option to work remotely.
If you have roles that can be aptly managed from home, consider employing remote workers.
Hiring part-timers and consultants to come on board when needed can also help you reduce your operational costs significantly.
Make it Continuous
The best way to approach cost-cutting is by approaching it as a continuous process.
Continually assess how you do business and keep track of your expenses. If necessary, make changes and ensure to measure your cost-saving efforts to see which ones deliver the most savings.