Reduce Expenses Not Quality with these Tips
The first and longest battle a business owner will have to fight is the one over their capital. You will need to care for it at every step. Keeping costs down without cutting corners is a difficult task, but it is far from impossible. Here are nine ways you can limit expenditures without sacrificing company quality or customer satisfaction:
1. Outsource Whenever Possible
Hiring full-time employees is expensive, and for some tasks, often unnecessary. A better option can often be found through outsourcing. While some operations are best handled in-house, accounts receivable is an excellent candidate for outsourcing. he professionals who staff these accounts receivable outsourcing operations understand the rules of the game, and they use that knowledge to produce real results for you and your small business.
2. Study Before Spending
Before you spend on anything, you must confirm its value to your company. When buying computer equipment, for example, you first need to examine whether it can run the needed software at a workable speed. Before launching your product, you need to invest in testing it. It might be expensive and time-consuming, but it’s better than running into the market unprepared and wasting your time and money.
3. Keep Things Simple
When making plans as an entrepreneur, you keep your systems and processes as simple as possible. Think about the bare minimum required to get your product in front of customers, and do that. The frills can come later. Those embellishments are costly, as they come with more tasks and personnel. Keep the company and product simple, and you’ll cut down on expenses.
4. Get an Accountant
If you want to take care of your small business’s finances, you need to understand them. Tracking every cent, where it comes from and where it goes, is critical for budget management. It’s also a full-time job. Even if you have training, it’s better to delegate the task to a dedicated employee or work with an accounting and tax preparation service so you are free to handle bigger issues at the startup.
5. Check Capital Each Month
Every little expense adds up, and if you don’t keep your eyes on your money, it will be gone before you know it. At the end of each month, take a close look at your expenses. Ask all your employees to send in business-related receipts so you have as complete a view of where your money is going as possible. If an expense did not move your agenda forward, it was an unnecessary expense. Cut it out, and make sure your team knows not to spend that way in the future. Each month you should have a good picture on your cash flow.
6. Put Effort Into Your Hiring
Hiring people is an expensive and time-consuming endeavor. However, it can become more costly if you have a high turnover rate. The longer you keep an employee, the more returns you have on your hiring expenses. When you hire someone, don’t just consider them for the immediate future. Consider whether the applicant will be valuable to the company in the long run, and whether they have a flexible skill set that can be applied beyond their job title.
7. Use a Coworking Space Instead of an Office
Office spaces are expensive, which is why many of today’s businesses elect to allow people to work from home. However, for some industries working from an office is necessary. For entrepreneurs on a tight budget, there is a middle-ground. When you must meet your team in person, you can utilize a coworking space. As a bonus, using one makes networking easy, due to the presence of other small businesses and frequent events.
8. Look and Ask for Discounts
One of the best ways to manage your budget is to simply spend less. It might be a surprise to some, but discounts are often readily available when requested. Even getting a percentage off for the first six months of software subscription can reduce your expenditures and increase your cash flow.
9. Make a List of What You Can Cut in a Heartbeat
Entrepreneurship is a journey filled with numerous twists and turns. You never know when the tide can turn against your business, so you need to be ready to cut the fat at a moment’s notice. Keeping a list of beneficial but non-critical expenses will let you react to a poor sales month or quarter keeping you nimble and flexible.
The Bottom Line
Keeping costs down as an entrepreneur is a massive task in itself, but it’s a task that you need to accomplish. If you do that right and consistently, you will make your company’s future a lot brighter and a lot easier.
About Universal Funding
Universal Funding is a private funding source that has funded thousands of businesses and more than $2 billion since 1998. We turn your accounts receivable into the funding you need through invoice factoring and can have capital in your hands in a matter of days. Call us today for more information at 800.405.6035.