When starting a new business, your thoughts are primarily concerned with revenue generation. However, you quickly learn that managing your expenses in an effective way is equally vital. It may seem like a daunting prospect, but making your capital work harder can be a relatively easy challenge.
I know I’m a big advocate of good organisational skills, but building a solid plan is everything. Here are eight great items that should feature in your strategy. When they do, your financial health will improve before you’ve even increased your sales.
- Choose scalable tech features. You will need to use a lot of applications and software packages for various business tasks. Likewise, you’ll need data storage and servers. When choosing annual plans and licence agreements, you’ll often take on more than you need. Switching to virtual desktop solutions can solve many of your problems. You only pay for the users that are needed while you can upscale or downscale as and when required. The no-contract approach is great for SMEs who need to manage cash flow too.
2. Orgnaise your accounts. Whether you hire an accountant or use software, staying in control is key. Knowing where you stand can save you from nasty surprises and subsequent fees. Crucially, you must learn about all the tax entitlements and deductions that you can make. This information can save you thousands of dollars. Better still, it’ll encourage you to adopt a better mindset as you look to make further savings elsewhere.
3. Cut waste from your energy bills, services, and material purchases. Learning to run price comparisons on all utilities and supplies might only trim 10% of the bill. Still, this money soon adds up over the year. You may find that it is possible to negotiate more agreeable terms with your courier service or delivery team. As with your digital products and services, the key is to ensure that you only ever pay for what’s needed. Encountering excessive expenses by neglecting the need for organisation will cause unnecessary pressure.
4. Embrace automation and modern tech facilities. Human error can have a negative impact on productivity and, consequently, financial wellness. Adopting the latest facilities that are aligned to your business needs can make a world of difference. For the best results, you should pay attention to the OEE method, which can help you improve on the mistakes. Some small businesses may only have limited machinery and equipment needs. Even so, efficiency leads to savings.
5. Know your staffing options. Even as a small business owner, there is a strong possibility that you’ll need to hire some employees. While a strong workforce is your greatest asset, you should not overspend. Knowing your options will be key. After all, using remote workers, temporary workers, and outsourced services is often cheaper. You’ll only pay for the services that you need. So, even a higher hourly rate saves money compared to having full-time workers with little work to complete. Removing the waste means you can pay your remaining workers fairly.
6. Make your time work harder. We all know that time is money, and you must not fall victim to time-wasting exercises just because they are the ‘done thing’. Lots of businesses are guilty of holding needless team meetings. Your cloud-based project management tools and team messaging apps allow you to lose these activities. In favour of digital interactions. You can also find that embracing tech in this way saves the need for expensive business travel.
7. Protect your business with the best security tools and services. This may cover cybersecurity features to prevent breaches or downtime. Or you may find that protecting stock and business premises is the greatest challenge. Either way, protecting yourself against thieves should also extend to your intellectual property. Copyrights, trademarks, and patents are all key. Meanwhile, non-disclosure agreements can be key when someone leaves your employment. It’s always better to be safe than sorry.
8. Embrace digital marketing. I’ve used Instagram to achieve fantastic results. There’s no reason to think you can’t do the same. Posting on social media is free while creating videos and infographics doesn’t have to cost much. Even paid campaigns through PPC are very cost-effective if you set the right demographic. You only have to look at how the big brands use social media to see its importance. As long as you find your voice to reflect your brand, success should follow.
Learning to master cost-effective operations doesn’t suddenly guarantee success. But it certainly improves your chances of achieving your goals. Better still, it will take profit margins to a new level. You’ve got this.