Whether big or small, running a business is no mean feat, and costs can quickly become unmanageable. Since the financial crash of 2008, a significant number of businesses have been struggling to cope with the higher running-costs associated with inflation, as well as a customer base with less income at their disposal.
The businesses which tend to survive such tough times are the ones which adapt. Fortunately, there are plenty of changes you could implement to cut the costs of running your business, and ensure survival and success well into the future. Below are our top five suggestions.
One – Switch from Traditional Advertising
From placements in magazines and newspapers, to TV and radio ads, advertising through traditional channels is hugely expensive, and simply unrealistic for many businesses today – especially smaller ventures. With the dawn of the internet, though, advertising has transformed – it no longer costs the earth to get information about your product or service out there.
Having an appealing website which is kept up-to-date is the single best way to engage with an increasingly tech-savvy public. You could use services such as Google Adwords to make sure your business is displayed in the results for certain search-terms. This tends to be cheaper than exploiting traditional advertising channels, although the price you pay will depend on the search term you choose, so being flexible and balancing cost with effectiveness is vital. You could also avoid paying for these services altogether by focusing on SEO – Search Engine Optimization. This is tailoring your content to rank highly in search results ‘naturally’. Google themselves have produced a handy guide on getting started.
These days, making use of social media is, basically, non-optional. Frequently sharing great content – whether videos, blog posts, or other media – can help you amass an audience who may engage with your business. Eschewing traditional ads in favour of these approaches can really cut the costs of running a business.
Two – Consider Outsourcing
Employees’ salaries constitute a serious chunk of all business spending. Whilst making staff redundant should be avoided at all costs, starting out with a smaller team and outsourcing when needed is far more cost effective than hiring more workers than your business usually requires. You may be able to take on extra and more specialised staff as you expand, but to cut costs in the earlier stages hiring a smaller team makes more financial sense. For tasks beyond your team’s speciality, or particularly busy periods, outsourcing can bridge the gap without necessitating an extra salary to pay every single month.
Having a smaller staff can also make for a greater sense of team spirit and camaraderie, as each member directly depends upon each other for the company’s success.
Three – Try Telecommuting
It isn’t possible for every role and every company of course, but if some of your staff are able to telecommute the savings to your business can be huge. When an employee works from home, the business saves money on office space, energy, and even travel if the company subsidies the cost. Many employees will prefer the flexibility which this arrangement offers too, which is good news for your reputation as an employer.
If enough employees are willing and able to telecommute, you could even be able to save further costs by downsizing your office. This is a somewhat extreme scenario, but with the leaps and bounds made in communicative technology in recent years, the possibilities for saving are endless.
Four – Go Green
This strategy is doubly effective, sine it’s good for both running costs and the planet – not to mention your company’s reputation. Simple changes such as making sure everything is turned off when not in use, installing energy-saving bulbs, or keeping the thermostat a degree or two lower in the office can add up to real savings and reduce your company’s environmental impact.
You could also go green by printing hard copies of documents as little as possible, and investigating ways to make production more energy efficient, if your business sells physical products.
Five – Get Debt under Control
Starting a business usually means borrowing money, and as costs rise when your business expands, repayments can become difficult to meet. If your business is struggling with debt, talking directly to your creditors can be a good idea. You might be surprised by how co-operative they can be when it comes to negotiating a more affordable repayment schedule. Ultimately, creditors want to get their money back, and if allowing you to pay in smaller instalments over a longer period of time allows them to achieve this, they will often be willing to make adjustments.
If this doesn’t resolve your company’s problems with debt, you could consider a formal debt management solution such as a self-employed IVA (Individual Voluntary Arrangement). This solution allows you to make affordable payments, based on your income and expenditure, as well as writing off some of what you owe.
When it comes to saving money in business, the real key is to keep a careful eye on exactly where your money is going, and to be adaptable. The marketplace is constantly changing, so it makes sense that businesses often have to reassess spending priorities to keep up – good luck!