When it comes to running a small business, cash is king. The more of it you have, the better off you’ll be.
Countless enterprises have gone bust because of cash flow issues. Whether the problems arise because of an unexpected expense like costly equipment repairs that you have to put on a credit card, or a slowdown in business, the outcome is the same: the small business owner is scrambling to find the money to pay for inventory or cover payroll.
Cash flow woes don’t have to be a foregone conclusion. There are ways to ensure you are always flush with cash. But it requires a different mindset than when you were an employee. That $600 smartphone or pricey lunch meetings will take on a new meaning when the cash is coming out of your own coffers.
The good news is that there are a host of ways to curb expenses and grow your business at the same time. From embracing social media marketing to cutting office expenses, here’s a look at strategies to save money and run your business more efficiently.
1. Expand Your Social Media Marketing
Social media has become a powerful way to find new customers. Just ask the legions of businesses that Tweet, Like, and share content daily.
But social media marketing isn’t only the domain of big businesses. Small businesses can benefit too. When done correctly, it can translate into new customers and repeat business.
Targeting all of the social media platforms isn’t realistic, particularly among cash-strapped small businesses. A better strategy is to go where your customers are hanging out. One social media platform is going to be wildly popular with a particular demographic while another could be completely unheard of.
One of the hardest things for small business owners to do is create a social media brand. They are too busy running the business to spend time thinking about how to market their services or that of the company. But it’s important to have a brand on social, which should be a reflection of who you are and what your company is trying to achieve.
Equally important is testing the waters before leaping in. The last thing you want to happen is your social media strategy fail right out of the gate. People will remember your stumbles, which could tarnish your brand and hurt sales. Before you go live on social media use the platform for a while, spending time on the pages your customers frequent to get a sense of what they like and don’t like.
Social media isn’t static. Things happen in real time. Consumers expect their concerns or complaints to be dealt with in minutes rather than days. They also expect to visit social media platforms that are fresh, current, and relevant content. Those are the goals you should strive for all the time. In order to build your brand on social, you have to be active on the platform you’re using.
2. Cut Office Supply Expenses
Every penny counts when it comes to cutting expenses, and that’s particularly true when running a small business. Whether it’s the cost of supplies from wholesalers or the expenses associated with running an office, it can quickly add up if left unchecked. That is why it’s important for small business owners to keep a regular eye on business expenses and to be willing to shop for a better deal constantly.
Slashing business expenses doesn’t have to end with supplies. It can also apply to your real estate. Unless you operate a storefront or warehouse, chances are you can get by with a smaller space. For small business owners looking to slash expenses, office space should be on top of the list of areas to target. Moving into a smaller office or negotiating cheaper rent on an existing space are great ways to free up capital that can be poured back into the business.
Depending on the type of business, you may be able to forgo the office entirely, arming your team with the proper digital collaboration and communications tools to work remotely. Monthly meetings at a rented conference room will be a lot cheaper than paying rent every month. On top of the savings from office space, you won’t have to worry about paying insurance, utilities, and other costs associated with operating a physical office.
3. Hire Only When Necessary
Giving up control can be hard for a small business owner, but sometimes doing it all can end up hurting the bottom line even more. If you spend all your time finding employees or managing paperwork, that’s less time dedicated to landing new clients or coming up with fresh products or services.
The Internet makes it easy to outsource certain business tasks. Cloud services are available for everything from payroll to customer relationship management. There are also a host of more traditional outsourcing companies that can take care of the busy work for your business.
Qualified and highly talented freelancers are growing in numbers, which means they provide small businesses with a viable way to save money on staffing. They can be attractive to small business owners because you can hire them for specific projects rather than bringing them on full-time. That means you won’t have to pay them when business is slow. You also don’t have to worry about offering benefits such as health insurance and/or a company-sponsored retirement savings plan. While they may command a higher rate than an hourly employee, the business still stands to save money going this route.
4. Buy Like-New Tech Products
When you need a new laptop, printer, or any other tech product, search Amazon or eBay and look for the “like new” listings. Often, these products are actually brand new — the box may have only been opened, or a UPC code might have been removed. They’re typically sold at much lower prices than retail.
As a small business, you also benefit from the tax deduction of replacing electronics and big office equipment — donating old equipment should be something you file in your taxes.
5. Use Free Computer Software Titles
Although it’s not always obvious, there are amazing deals available to you online, even when it comes to downloading important (and usually expensive) software for better management of your business. For example, Softonic or Freeware Files are two websites that offer you myriad software programs your business may want or need—for free. From time management to booking programs, you can find many services offered for free for smaller-sized businesses.
Similarly, the free protection offered by Avast or AVG can be enough for your business as long as it stays small. If your business is growing, it probably means that your profit margin is, too. In that case, consider upgrading to a paid computer security software, as the bigger your business, the riskier it is to leave your electronics unprotected from cyber-attacks.
The holy grail of free business apps comes the way of Google. The Internet search giant offers a bevy of applications including document creation, spreadsheets, and a shareable hard drive — all for free.
6. Consider Bartering to Save
Bartering dates back to ancient times when people swapped goods and services. The modern way of bartering is to have networks of businesses across the globe that trade products and services either in person, over the phone or via the Internet without the use of cash. Whether a lawyer in New York has spare time on his hand or a Website has room for more digital ads, businesses — mostly small ones — can use bartering to get a host of services.
When it comes to bartering, small businesses can do it officially or on the side. For those wanting a more structured way to barter, they can join a barter exchange. For small businesses that don’t want to become a member of a bartering exchange, there are a host of websites that let individuals trade goods and services. Having conversations about bartering with suppliers, business associates, or other local organizations can yield good results as well.
You might have a tight budget for your small business, but that isn’t actually what will hold you back from professional success — not using what you have smartly is generally where you can go wrong.
Take a serious look at your business’s financial situation and ask yourself whether you’re spending your business’s budget in the best possible, most effective way. Is your staff really working for the money they’re getting paid? Do you really need all those office supplies? Did that new computer really help you in any way?
The more attentive you are to both your business’s revenue and spending on a month-to-month basis, the more you’ll understand when it makes sense to save and when spending a little extra will help you hit your financial or professional goals.
Do you have any tips for running your small business efficiently?
Author: Thomas Smith is a freelance writer and entrepreneur. He has over 15 years of experience running businesses and writes for dozens of publications on the subject. He lives and works in Denver, Colorado.