When you dreamed of opening your business, you probably mostly thought about the money you could make. Sure, you liked the idea of working for yourself and making your own hours, but making money was your priority. You may not have considered just how much of your expenses would be required to run a successful business.
You want a good return on investment in everything you do. You won't keep much of the nice income you see on your financial statement if you spend too much. You need to take every possible step to save money so that you can keep it in your pocket. While you might think that all you have left are tough and uncomfortable decisions, there may be more ways than you ever imagined to get there. Here are seven simple ways to save your business money and improve your bottom line.
1. Change your marketing strategy
Many businesses believe that to be successful, they must get their brand in front of as many eyes as possible and hope that a large enough portion of them make purchases. However, this type of marketing is prohibitively expensive and not practical. Too many audience members have no chance of wanting or needing the product being advertised.
To save money and be more effective, you can tailor and target your marketing to fewer people but with a higher percentage of people who will be interested in your product. The best way to achieve this is through social media marketing and search engine optimization.
Social media ads can target people with common interests and geographic locations with your ideal customer. Search engine optimization involves developing your website so that it appears high in search rankings for specific keywords. If a customer finds you this way, they are actively looking for something similar to what you offer.
2. Automation
There are specific tasks that are necessary but are also expensive, time-consuming, and generally hated by everyone in the office. Data entry is one such task. Fortunately, in this day and age, there are many solutions to automate business processes and make life easier for everyone.
Using automation solutions is less expensive than hiring a person. In addition, they help streamline these processes so that they are carried out more quickly. Additionally, you can have data ready to use whenever you need it. You can also automate payroll, accounts payable and receivable, and much more.
3. Outsourcing
Just like automation, outsourcing can save you a lot of money by taking specific tasks out of the hands of your employees. Sometimes it's not worth recruiting, hiring, and training someone to do a job that doesn't take up much time in a day.
Instead of paying a full-time person for part-time work, you can outsource to an expert who will only be paid for their work. It could be accounting, office support, human resources, or anything else. If you don't need someone on-site full-time, look into your outsourcing options.
4. Insurance
The last thing you should do is remove coverage to save money. You need all the protection you can get. However, you can streamline the range you have. For example, you need general liability insurance in the event of a lawsuit. If you have a vehicle, you will need commercial auto insurance. Service businesses will need professional liability insurance.
However, if you pay for something you don't need or that doesn't apply to your business, you can delete it. Every year you should review your policies to make sure you have everything you need and nothing you don't. This is also an opportunity to compare prices.
5. Cut expenses, not employees
Instead of laying off your valuable employees, you might want to look at job-related expenses and benefits that may not be necessary. For example, if you have a regular staff lunch or provide snacks and drinks in the break room every day, you may need to cut back on them.
Of course, this should only be done in extreme situations, as you don't want to upset your staff. However, if it must be done, clearly explain the problem so that everyone understands why you need to take this action.
6. Switch to remote work
When Covid-19 first took its toll, millions of people opted to work remotely to minimize contact with other people. Today, remote work has become very common. If you can transition some of your workers to remote jobs, you can move your business to a smaller office. You don’t need to have a central office if you work remotely. Construction costs are some of the largest a business can have, and the more you can work remotely, the more you can save.
7. Fewer services
You may be able to shift some of your maintenance tasks to your employees. For example, instead of hiring cleaning services, you can require employees to clean their premises and empty their trash cans. If you need cleaning services, you can always reduce the frequency of their visits.
Simply go from twice a week to once a week to cut those costs in half. There may be other regular services that you don't want to get rid of, but they may not be necessary. Streamline everything to ensure you're spending as little as possible while still keeping up appearances.
Saving money is almost as important as making it. Every penny spent means fewer pennies in your pocket. However, it can be difficult to see what changes you can make by looking at your operations. This list lets you know which expenses can be eliminated to save your business money and improve your overall ROI.