As a rookie business owner, you must understand that every dollar and cent you have is of immense value. Even when your business is experiencing a boom in profits, it is vital to stretch out every quarter if unnecessary, unexpected expenses leave you financially crippled.
After all, lowering operational costs whenever and wherever you will ultimately lead to success just as it would when improving your sales effort or a combination of both. However, when multiple bills pile up, and things get tough financially, we know it can get pretty challenging to save and spend money simultaneously.
In the end, the initial expectations you have from your business won’t match up with its financial realities. In simple words, you’ll probably end up spending twice the money during your first year in business than anticipated.
However, it turns out that almost every new business owner makes a few common financial mistakes. But, the good news is that most of these mistakes are entirely avoidable with the help of some efficient business planning and some easy-to-follow money-saving strategies. Some of these money-saving methods are listed down below.
Avoid Purchasing a Full-Time Office Space
With advancements in technology, most online business owners can run their operations remotely from the comfort of their own homes. That said, if you’re in the online retail business, this tip won’t be practical for you.
If you don’t have a retail business, you should consider staying as mobile as possible. Or, better yet, avoid purchasing an office space at all. Buying physical business premises is an unnecessary cost that can be avoided.
Instead, consider renting. Why? Because rented office space offers the same facilities and features you’d get if you bought the property, allowing you to save thousands of dollars you’d need to get the property under your name.
Go Green and Paperless
While becoming a sustainable business will always be an immense challenge, especially if you’ve only been in business for less than a year, using paperless invoices, bank statements, and bills will allow you to save time and, most importantly, money.
That said, most point-of-sale systems, utility companies, and banks will even go to the extent of offering incentives to companies who go green or encourage it at the very least.
In the end, going green will allow you to save tons of cash on paper costs alone if you make it a habit to email invoices and receipts to your clients instead of handing them hard copies.
Moreover, it would be best to take some time from your busy schedule to scan every business document, converting them into digital copies.
Doing so will allow you to save money on office writing supplies such as paper and ink while enabling you to share and send information without a hassle.
Purchase Used Business Equipment
Regardless of the size and nature of your company, business equipment comes at a price, and sometimes this price is a rather significant one. Sure, everybody loves that fresh smell a new product gives off when it comes out of the box, but ask yourself, is it wise to pay for something in full when you can purchase it for a fraction of the price from the used market?
The same is the case for business equipment. It makes sense to purchase second-hand equipment, be it manufacturing machinery or office equipment.
In fact, you can buy new technologies, desks, printers, and other day-to-day office supplies slightly used and save at least half the amount of cash that you would’ve spent on their new counterparts.
So, ensure that you check Facebook marketplace or your local newspaper for going-out-of-business sales. Who knows, maybe you can find a slightly used office desk or other pieces of furniture to redecorate your office space.
Turn Your Customers Into Your Marketing Team
Referrals are a free and effective way to utilize your current crop of customers to gain more clients. Customers who come to your business generate around 16 percent more profit, helping your business with constant month-to-month client growth.
Consider offering your current customers incentives such as giving them a gift or a service subscription for ten successful referrals. Doing so will allow you to save money and time on your marketing efforts and expensive paid advertising.
Research Your Banking Options
It is a well-known fact that most banks and loan providers carry hefty fees for their services. So, now is the time to research different banking options to ensure you obtain all the amenities you can afford.
For instance, instead of going with a national bank, consider a more regional financial organization that will do its best to keep you on board as a customer.
That said, typical monthly bank charges include mailing statements, overdrafts, ATM usage, maintenance fees, etc.
Also, when selecting a bank for your business transactions and other financial activities, investigate all of your requirements, such as the minimum balance and benefits like interest rate and fraud protection.
Hire Freelancers and Contractors
A well-trained full-time workforce will cost you an arm and a leg nowadays. Sure, employees are the heart and soul of your new business. However, instead of onboarding full-time employees and paying their salaries, consider using independent contractors and freelances till you become financially stable.
After all, requirement efforts and employee training take time and money. But, on the other hand, freelancers and independent contractors are already well-versed in their field of interest and will only charge you for the services you hire them for.
For instance, you can outsource your help desk to a managed customer support provider instead of hiring a team of in-house employees. Or you can also hire a freelance accounting professional instead of an on-site one to manage your business’s financial activities.
In the end, going the freelance route will undoubtedly save you more than you think.
When it comes to saving cash while running a new business, there are numerous things you can do. However, some might not be as effective as others, depending on the nature and size of your business.
That said, if you’re able to save more, it is probably worth giving the abovementioned tips a shot.
In the end, whatever happens, stick to your business plan, make the right investment decisions. When you do, you’re setting your business up for success sooner rather than later!