Cutting corners: Ways your business can save you money

Entrepreneurs and new business owners may struggle to move forward on their business plans out of fear of how they will fund their operations. Saving money however you can is critical to your startup’s survival. Whether you’re just starting to put together your cash flow projections and business plan or you’re already in business, there are ways to cut costs on necessary expenditures to stretch your operational dollars a little further. Consider the following five ideas to cut corners and save money in the long run:

1. Location Overhead

Your company’s physical location is a considerable part of your operating expenses. You may not be able to avoid having to lease a space and make rent payments, but there are three ways you can save money on your lease overhead:

Lease a Smaller Location

If you haven’t committed to an office or retail space yet, consider leasing the smallest space you can get away with. Doing so could cut your rental payments and utility bills, since you won’t have to light, heat, or air-condition such a large space.

Use a Coworking Space

There are coworking locations nationwide that provide use of workspaces on an hourly or daily basis. Perhaps you can start your business by having your key staff work remotely from home until closer collaboration or meetings are required. You can then rent a coworking location as needed to conduct business with your team.

(Editor’s note: Coworking spaces often include comfortable ergonomic chairs which can protect you from neck and back pain.)

Share Your Location

Is there a business owner or company that provides non-competing or complementary services to yours? For example, if you have a beauty and clothing boutique, can you rent your attic as a studio to a local wedding photographer? Or if you have a men’s barbershop, perhaps you can share your space with a tattoo artist.

Consider renting a portion of your business location to another business or startup to share in the lease costs. It can save you both money and also create a synergy where you can share customers without directly competing with each other. Make sure to check with your landlord before you do — many leases are written to prevent subletting or sharing of a commercial location.

2. Make Green Energy Choices

One of the easiest ways to reduce your startup’s costs is by addressing your company’s energy use. Place timers on your light sources, so they turn off at a set time. Change all your lightbulbs to LED bulbs. They may be more expensive than a regular lightbulb, but they’ll last longer and use less electricity, offsetting their cost in lower utility bills in the long run.

Look for government rebates on many energy-efficient products like light bulbs, appliances, and industrial equipment that uses high-energy processes. Making cleaner and greener energy choices is good for your company’s bottom line and something you can market to your target audience to show your commitment to the environment.

3. Vehicles and Equipment

If you need company vehicles (such as trucks or employee cars) or larger equipment, buying them new will likely put a major dent in your cash flow. If you’re not sure how much you can afford, consider buying pre-owned vehicles or lease the equipment and cars your company needs for the short-term. Revisit your cash flow projections and income after a couple of years to evaluate if buying makes more financial sense, or if continuing to lease is the best decision.

4. Staffing

Hiring employees is a big financial commitment. You’ll be responsible for their pay, taxes, insurance, and benefits. If you can’t afford to bring on full-time hires, but your business is suffering from a staff shortage, get creative with your hiring habits. Freelance or contract workers could handle specific tasks for a short period of time. A virtual assistant based remotely overseas can take over secretarial, administrative, and smaller marketing duties for less than a local employee.

5. Marketing

Many businesses make the mistake of not spending any money on marketing until they start making money. The two are interrelated — if your company is not actively marketing and reaching out to your target audience, your sales are likely to remain stagnant or decrease. Having a low marketing budget doesn’t mean you should scrap your marketing plans. You’ll need to get creative instead. In fact, some of the best marketing techniques are considered guerilla marketing tactics — they’re bold, they’re creative, they’re usually cheap or free, and they work. Some free or low-cost marketing ideas you can use to promote your business and grow your sales include:

  • Focus on creating a website using a free template from your web host
  • Market to locals through social media
  • Make sure your signage and windows tell your company’s story and include your website and social media handles
  • Ask your friends, neighbours, and family to tell their coworkers and friends about your business
  • Organize events like art walks, restaurant strolls, or outdoor markets, with other community businesses to promote each other
  • Attend business networking events
  • Promote your business at your children’s school
  • Learn how to write a press release and send one to local newspapers, magazines, and blogs
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