Corporations make lots of money, but their huge size means they also waste lots of money through inefficiencies.
One of the best things about running a small business is you can easily see where you could save money, act on it, and see the benefits. A small business’s ability to make quick changes is one of its greatest advantages.
Here are five ways your business can save money, stop wasting it, and how it can become more efficient.
Invest in your employees
When you hear the word “invest” you automatically think spend more money. But in this case we’re talking about more than just giving them more money. We’re talking about caring about your employees and wanting them to do well.
This means instead of hiring from outside of the business whenever you need somebody highly-skilled, you should think about promoting your current employees. You’ll save time and money you would have spent on looking for the right employee, you won’t waste a few weeks at the beginning while a new employee gets up to speed, and the promoted employee will feel appreciated and want to continue doing a good job, so maintaining or increasing efficiency.
Why are we spending this money? Are there any alternative ways to operate? How can we do this with less money? These are a few of the questions you should ask about your small business. Take a look at all of your business’s costs, even the smallest ones. You might find a cheaper supplier for your paper, for example, or you could decide to go all the way and make your office paperless and almost completely eradicate your paper costs. You might also find other ways to run your small business differently – maybe you could outsource your IT support, for example.
Look for the best deal
It was mentioned briefly in the previous tip, but you should spend time researching different suppliers, finding out what they can offer and for what cost. You can then use your new knowledge as ammunition when it comes to negotiating with suppliers – and you really should negotiate. The worst that could happen is they say no, but there’s always a good chance you’ll be able to save some money.
Use your office wisely
Office space – if you have one – can be a big cost, and ideally you’d want every square inch of it to be used to make your business money. This means that if your business is still really small but your office is too big, consider subletting the extra space, don’t buy duplicate equipment if you don’t need it, and buy good quality equipment so you don’t have to spend a fortune on maintenance and repairs.
People only have so much time in their lives, so their time is expensive. The biggest cost for a small business is the cost of employees – and why wouldn’t it? They are the people who make your business happen.
But you don’t always need to hire everyone full-time. It can often be more cost effective to hire contractors or freelancers for certain costs. Sure, they’ll cost you more per hour, but you won’t be paying them for a whole year when you only have a week’s worth of work for them to do.
Shoaib Aslam is the co-founder of Pearl Chartered Accountants, a UK-based chartered accountancy firm that has multiple locations across London. They are experts in helping startups and established businesses with all aspects of growth, strategy, scaling up, accounting and tax planning.