7 Ways Small Businesses Can Cut Down Costs in 2021
Every year, thousands of startups emerge and find suitable partners for funding to keep their baby-business running. However, most of them succeed in accessing some form of funding, but a significant number of them fail too—those who fail either shut down the business or postpone the idea of restarting the business.
Half of the small businesses fail to convert this infusion of capital into tangible business growth. Let's talk with numbers now.
It is seen that around 70% of the businesses shut down in less than 20 months, right after getting the first round of funding. Out of those from the startup world, 29% fail because they run out of cash. It is proven and known that money and costs are the second-most common reason for startup failure identified in a CB Insights report.
One big reason identified was that startups did not implement smart and money-saving practices in Silicon Valley. Business owners, especially those who have succeeded in getting a loan or acquiring any investment opportunity, need to find ways to cut down costs, prioritize expenses, and search for the means of survival in the longer run. That's why investors are not-so-happy with small businesses.
The most common reason for a poor investor-owner relationship is the bad cost management practices, which contributes to the high failure rate for businesses with a history of one or more funding rounds.
Let's talk about the issue.
"Money."
We understand that saving money and cutting costs as a small business owner can be complicated and sometimes tricky. If you're an early-stage startup, money might be tight already. Therefore, to hold your hand and take you out of this problematic giant, we've compiled a list of money-saving tips.
Here are some ways for you to trim overhead here and increase efficiency there until your business is on its way to better financial health.
Encourage Energy Usage in the Office Premises
Services and functions are often a major cause of overhead costs. They account for a significant portion of capital. Therefore, it is suggested that if you can find a way to utilize energy efficiency in the office, you can have some significant cost savings.
One example is heating and cooling systems. Looking for a smart thermostat system can do the job because it observes the climate and temperature and adjusts accordingly. This way, you can control costs without compromising on comfort.
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Reduce Paper Consumption – Go Green
During COVID-19 times, the exchange of everything is considered threatening, and that's where the concept of going green was introduced. You must have heard it before, and it's still true.
Going green saves green.
Whether you own a home-based business, office, shop, or whatever type of space you have, the more energy-efficient your space is, the lower utility bills you're going to have.
We recommend going for the systems that have an e-invoicing feature. Ideal invoicing management software will serve the purpose of emailing receipts to the recipients and saving you from the paperwork. Going totally paperless may not be the ideal case in the current situation, but you can always save some money by reducing paper usage at your office. Spend some time automating your processes, and you'll never turn back. Reduced paper consumption means:
fewer paper purchases
lower storage costs
greater efficiency
Divide the Expensive Advertisements - Be a good neighbor.
Whether you are planning to have a sidewalk sale or calling out some contests, do it together. Jointly take your marketing activities further by sharing mailing lists, distribution channels, and suppliers with businesses that sell complementary goods or services. It works like magic!
Live in the Cloud.
As you step into the world of automation, you'll see cloud-based solutions everywhere. Even before you even finish asking your question about a business problem, you'll get to know the super-advantageous cloud-systems. And that's not only the word-war. It is seen that an advanced cloud-based POS system for repair shops and retail businesses, can cut down costs up to 50%.
Hire Smart, Inexperienced People.
Having years of experience is not what makes a business successful. Experience isn't everything, and it costs more.
Remember that, next time you put up a job ad, do not mention having a five-year plus experience in the ad copy. Eliminate the line that says, "Must have XYZ years of experience," and change it with "Must be eager to learn."
Many successful businesses adapted this approach and hired members who were fresh graduates, gaining a financial benefit by providing an entry-level salary.
We suggest you cut out costs here by having employees who are "up-to-date on the latest technology...often nimbler and more eager to learn."
Clarify Your Policy on Extra Services.
Rather than giving up on all the charitable/extra contributions, spend 30 minutes once and put together a rules-guide that will clarify your procedures and limits.
It helps businesses who work in the food industry or retail too. A retail business can be overwhelmed by requests for "food donations" for fund-raising events. Also, in the retail business, you can cut down costs by saying 'no' to parcel deliveries and such unnecessary stuff.
Read More: https://repairdeskco.blogspot.com/2021/07/10-easy-ways-to-optimize-your-billing.html
Keep Your Profit-makers Happy.
It may seem a little odd, but spending a little to save a lot does make sense in some cases. Experts recommend taking the proactive approach of rewarding, profitable customers to get returning business from them.
What does that look like?
For some small businesses, it means making little gestures. It may be an occasional free delivery to their parcels, offering deeper discounts or value-added packages to your most loyal customers.
This technique also applies to your small team. You can offer your team a lunch to boost their morale and keep the work environment positive. It could also mean offering salary increments to employees who meet specific requirements for sales. That's how you are growing. You're investing in a relationship that will ultimately bring more earnings to your company.
Source : https://seomaester.com
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