Ensuring the financial stability of any business is no easy feat, especially in the current climate where customers continuously grow their expectations, employees look for better work conditions in any scenario, and brands need to compete like never before. The current business climate may be perfect for setting up your own small business, but it comes with unique challenges in the financial department: in order to turn a profit, you need to master the art of investing properly throughout the year, so that your business can thrive.
One of the most effective ways to preserve your cash flow and to allocate your funds more wisely includes refining your cost-cutting strategy, especially right now, as the holidays wrap up and at the start of the new year. Reducing ongoing business costs will ultimately help you use your existing budget for more vital business operations and ensure that you are providing the finest service to your customers. Here are a few simple, but very effective solutions that can help you control your expenses and protect your finances for the sake of business growth.
Empower employees to work remotely
Advanced digital tools and affordable tech solutions have enabled small businesses to expand beyond borders, but they’ve also helped them become more flexible in terms of internal collaborations. This hasn’t just been extremely beneficial for digital nomads and other workers who prefer a more flexible schedule, but it has also become a cost-effective solution for companies to hire a diverse group of employees while they find the best-educated, skilled people for their team.
Remote or home-based work has tremendous potential to reduce your expenses in the long-term. For starters, you will no longer have to cover the rent for the office, as well as the mandatory utility bills and other office maintenance expenses. Add to that, any office equipment such as desks, chairs, and landline phones would no longer be necessary, since your team will rely on tech they can work with at home. When you take commuting out of the equation too, you’ll realize that transportation costs will also be eliminated, and that you can use them for providing your employees with more appealing benefits and perks.
Cut office supply expenses
Even if you do stick to an in-office model, with perhaps a handful of employees working remotely, your office doesn’t have to remain a drain on your budget. You can begin cutting office costs by going paperless, or moving the majority of your operations into the digital realm. With the help of cloud storage solutions paired with top-notch cybersecurity, you can collect, safeguard, and collaborate on all of your company documents and data online.
You’ll simultaneously cut costs by removing printing gear and materials from your office, and by repurposing your storage facilities to serve a new, more advantageous purpose for your business. Running your business digitally means that you can rely on digital presentations, and encourage your employees to use tablets, laptops, and their phones to take relevant notes instead of using paper and pens. These may seem like menial expenses, but when they add up, they can be detrimental to your budget.
Choose a mobile plan for your employees
Much like with everything else in your small business, making strategic decisions when you purchase devices and their accompanying plans is always better than short-term thinking and planning. For example, getting brand-new mobile phones for your employees should depend both on the quality of the device you choose, but also the purpose they will serve. If they intend to use plenty of data for video conference calls, and spend hours talking with potential investors and clients, they need a plan that will cover their needs.
Without it, you will end up with phone bills that will completely wreak havoc on your budget, especially when you cannot foresee the expenses in this segment entirely. Sticking to a phone plan for your team will also help you reduce landline costs, and perhaps allow you to eliminate them completely from the equation. Add to that, using the same mobile provider as a company can bring other financial perks in the long run, so that is another option to consider for your team.
Work with freelancers
While your remote workers are on one side of the cost-effectiveness spectrum, you can also consider adding even more flexibility into your hiring methods. Unlike traditional work conditions, you can look for freelancers to collaborate with you on different, short-term projects, instead of hiring full time employees that will end up becoming a major drain on your budget without any real workload to give them.
Luckily, there are so many eager freelancers with brilliant portfolios out there, so you can use different platforms to search for the perfect match each time there’s a project with a set scope and budget. From graphic design, content creation, all the way to web development, you can easily find the skills you need for your specific industry without going overboard with your finances to hire someone and keep them permanently on staff. If it does indeed turn out to be more effective to hire someone full time, you can always switch to that relationship model for your future collaborations.
Although your brand will also need to focus on building a brilliant growth strategy and continue to attract clients to make a profit, cutting costs is certainly one of the most effective solutions to better financial management in small businesses. Use these tips, mix and match them depending on your needs, and you’ll be looking at a brighter future for your company in the years to come.
Jacob Wilson is a business consultant, and an organizational psychologist, based in Brisbane. Passionate about marketing, social networks, and business in general. In his spare time, he writes a lot about new business strategies and digital marketing for Bizzmark blog.