Raising capital and managing the finances can trip up even the most enterprising small business owners as they tend to be engineers at heart with a dream of changing the world with a revolutionary product. According to a report by https://www.inc.com, the inabilities to manage cash properly and raise the necessary capital are two of the principal reasons for startup failure. Unfortunately, much of the advice entrepreneurs typically get for making businesses more profitable are very theoretical and far-removed from the practical hurly-burly of running a small business in a competitive environment. The best and most successful entrepreneurs never lose sight of their cash resources and try to save as much as possible using every way they can. Some tips from small business owners regarding practical ways of saving money:
Facilitate Telecommuting
Dispensing with the conventional office setup can save a lot of money if your employees can work out of their homes. However, whether it is feasible to telecommute or not is often dependent on the nature of your business and the function the employees are responsible for. To the extent possible, encourage and facilitate employees to work out of home because not only does it make life easier for them but also it has the potential for handsome savings for you. The most obvious benefit of telecommuting is the savings on travel expenses and expenses on office rentals, utilities, supplies, as well as employee accommodation. Many studies also reveal that employees working out of the home are more productive.
Negotiate with Suppliers
In a competitive business environment, the cost of the raw materials and components can be crucial to your profitability so negotiating finer rates with your vendors, especially the ones from whom you buy more can save you a lot of money. The secret is to never take a rate as granted and always attempt to improve it by negotiating. Of course, this does not mean that you continually change your suppliers because someone or the other is giving a heftier discount. It is equally important to strike up stable relationships that will ensure adequate and timely delivery that will enable you to function smoothly.
Supplement the Cash Flow with Barter Deals
As a small business owner, experiencing cash flow problems will not be something new, however, just because you are low on cash does not mean that you need to tighten your belt. It is often possible to strike up barter deals with your suppliers so that you can give them something in exchange for something you need. Finding a fit may be a problem but exploring opportunities can prove quite profitable and end up saving a lot of money in the bargain. Vendors may not know how to deal with your proposal so you need to be patient and explain the benefits to convince them that there is a mutual benefit.
Use Cloud Services Extensively
The easy availability of high-speed Internet means that you no longer have to invest in expensive software and the hardware to operate them as well as incur the cost of an in-house information technology team for support. Almost every function that you can think of right from accounting to inventory control to logistics can be availed of straight from the cloud at very nominal monthly subscription charges. Another big advantage of using cloud services is that you are no longer tied down to your office for administering the operations as you can access the cloud services from anywhere. Using cloud services also makes telecommuting more practical for employees.
Get Debt under Control
As an entrepreneur, it is more than likely that you would have used your credit cards extensively to get your business rolling because of the lack of conventional funding opportunities at an early stage. However, credit card debt is very expensive and you can end up wasting a lot of money in interest by paying just the minimum amount every month. By consolidating your debts with a debt consolidation loan, you can save a hefty amount every month. If your business survival is being threatened due to very large debts that are impossible for you to repay, you can choose to go in for debt settlement to avoid having to file for bankruptcy, however, it is essential to deal with a reputed company like https://www.nationaldebtreliefprograms.com/ to avoid being scammed. Debt settlement is an extreme step because, you can hurt your credit score for as long as seven years, which can make further access to credit difficult and more expensive.
Replace Traditional Advertising with Alternatives
Traditional print and television advertising is expensive and usually not a very good option for small businesses having a local footprint. Even if you are a business that can potentially have customers from all over the globe, you can make your advertising cost-effective by using social media as well as Google AdWords. Using a cost per click model helps you to spend far more effectively to address only your target audience. For creating a buzz locally, you can use public relations exercises that can make a deeper impact in the minds of your potential customers. Organizing events can become more cost effective if you offer co-sponsorship opportunities to non-competing businesses.
Actively Practice Conservation
Taking recourse to simple yet very effective measures like switching off the lights that are not in use, using the sleep mode on computers, making sure that the air-conditioning is switched off during the night, etc. can make a huge difference to the power bill every month. Try to minimize the use of paper by using electronic documents. Even when using paper is absolutely necessary, print on both sides to save on costs. Use the phone or video conferring facilities to cut down drastically on travel. Not only do you save a lot of money but also minimize your carbon footprint.
Conclusion
Running a small business can be really tough because of a number of factors. The amount of money at any given point in time is limited but you can make the best use of it by actively cutting down on your expenses and saving more. Thinking smartly and making the best use of technology can help you to make your business efficient and save the maximum.
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