Making money doesn't mean much if you overspend it! Here are some big ways to cut costs down on your SME business' expenses...
Say
you're running the numbers for your new small business and you see that your
losses seem to be more than your gains. What happened? Maybe your product or
service isn't selling that well yet. Maybe it's a seasonal dip and these
numbers are expected. Or maybe... you've been spending more on your business
than you should. In that case, we've got some tips for you on how you can save
up on your operational costs.
1. Explore Business Plans for Online Services
We’ve
talked before about the kind of online tools and services that your business might
need. These tools, like any online software, would have a minimally functional
free version, a more fully-featured paid version, and often, a pricier business
version. If you use these kinds of software often or you require a large number
of machines to be using it, it might be worth checking out the business plans.
While
they might seem pricier when you make a direct comparison to the other plans,
you might end up saving more money by going for the business version. The
increased capacity and features can speed up productivity which in turn, can
positively affect your revenue. Of course, as with anything, be sure that you
stand to gain a lot by going premium before making the jump. It might not be
worth pursuing if the added features or capacity won’t be put to optimal use.
2. Sublet Your Extra Space
If
your business currently operates out of a sizable office or building that you
have free reign to use as you see fit, try subletting the extra space you have.
This tip also makes sense if you’re just running a tiny business out of your
house. Make your home office your primary place of work and sublet the other
rooms in the house for some extra income. You’ll be surprised by how much the
earnings you make here can offset your expenses.
Subletting
isn’t the only thing you can do with extra space. You can also rent out storage
spaces that you’re not yet using or offer it to other small businesses who need
it seasonally.
3. Hire Interns and Freelancers
This
is a much easier step to take if you haven’t already hired full-times to do
some of the labour necessary for your business. Ideally, before you begin
operations, consider whether or not the full-time positions you deem absolutely
necessary can be outsourced to interns, freelancers, or part-timers instead.
Use
resources like kaodim, upwork, or fiverr to look for short term contractors to
do seasonal or one-off work. You can find cleaners, maintenance workers, and
even people who can help with taxes. Paying them on a short-term basis like this
cuts down on a lot of overhead. Check out 99designs or designhill also if
you’re looking for people to do graphic design work like logos, cards, and the
like.
4. Fix Inefficiencies
When
you’re in the middle of running your SME operation, it can be tough to zoom out
and see the bigger picture of how everything works. Schedule a time to really
look into your product or service pipeline and see if there are any glaring
inefficiencies in the process that you can save money on.
Maybe
you don’t need a heavy marketing arm right now, or maybe you’re doing your
restocking a little too often. Whatever move it may be, you won’t know what it
is unless you take the time to honestly assess how your business functions and
look at it with an eye to cut down on costs and maximise your capital.
5. Negotiate with Your Vendors
Just
as with consumer services and utilities, you can actually call people up and
ask for lower prices. As a consumer, the product or service has an interest in
keeping you as a customer, so they will often try their best to come to a
reasonable deal. This goes double for your vendors when you’re running a
business. Try calling your vendors up and see if you can’t negotiate a lower price
with them.
To
ensure success with your negotiation, make sure you do your homework well.
Study up on the price of the competition, the level of service being provided,
and what kind of value your business can offer them. Doing this research
beforehand might even prove to you that you’re better off switching vendors!
But if that’s not the case, remember that your goal in negotiations is to
receive the best price and payment terms, so make every offer with that in
mind.
What Else?
Of course, these are not the only ways you can cut
costs for your SME, but we thought this might be a good place to start.
Starting a business can be a daunting task but if you are prepared with the
right tools and information, there is little to worry about.
