The waters of the economy are rough. Some say it’s getting better, some say it’s not. Either way, costs are rising and it is getting harder for your small business to cut through those choppy waters. Most business owners’ initial reaction is to pass the costs off onto the consumer. While there is a legitimate reason to do so — the consumer is, after all, the one needing your services — this is not always the best option.
Larger companies are able to offer services to the consumer at a lower price because they are able to purchase in bulk or can contract for multiple locations; doing so saves them money. You, on the other hand — as a small business owner — cannot offer such rates. If you raise your prices because your expenses have gone up, you increase the likelihood of pushing your customers to your competitors.
Instead of asking the customer to pay the additional costs and risk losing their business, look at how your business can save money. What are some things you can do to reduce your expenditures and lower your bills? That is what we are going to discuss: how to save your small business $$$! Although every small business is different, these tips will work for most of the industries out there.
How much are you spending on advertising? This is the first thing you should ask yourself when looking at your marketing budget. The question to follow would be: Is my marketing having the desired effect? You may be pumping a lot of money into advertising your business but not seeing the results you are hoping for. That is when you need to look into alternative methods of marketing.
Another way is to shop around and compare rates from different providers; businesses can sometimes find cheaper rates for the same level of service. In addition, businesses should also consider whether they need to use traditional forms of advertising, such as print or television ads, or if they can get by with cheaper options like online ads. Finally, by carefully planning their advertising budget, businesses can save themselves a significant amount of money.
Use the power of social media and the Internet — it’s virtually free! Network with clients and friends of those clients. This will allow you to reach out to a wider audience and draw in more clients for your business. This will require you to spend more time marketing but cost you a lot less dollar-wise.
Don’t Cut Your Staff
Cutting your workforce is almost always a bad idea. It will only hurt you in the future — the immediate future — and leave you in a worse situation than you were to begin with. Learn the lesson that so many corporations fail to realize: reducing the base of your company does not strengthen it during economic struggles.
If you have a staff of three or four people and you pay for lunch for the entire staff on Fridays, you may need to cut that expense from your budget. By removing a nonessential benefit, you are preventing the need to reduce your staff. This will allow you to save money and keep your business from facing trouble later on.
Rent Your Equipment
Instead of owning the equipment your small company needs, you should rent it instead. At least some of it. By paying a smaller amount monthly to a rental company, not only are you reducing the cost of the equipment itself but you are also removing any maintenance expenses and taxes associated with that equipment. You are also saving yourself from having to buy a replacement for the piece of equipment once it breaks down completely.
Hire Quality, Not Experienced
Experienced employees are a necessity in every industry, at every level. For some businesses, especially smaller companies, they can be a drain on payroll budgets. Their salary requirements are higher than inexperienced employees, and rightfully so. But oftentimes you can find an intelligent, quality person who is interested in the job, eager to learn, and extremely capable.
Hire these people instead. They will be cheaper to start (pay them fairly, though) and can be trained to do the job the way you need them to. Again, there is more time invested here, but the ROI will save you money and give you a great employee!