5 Ways To Save Money In Your Small Business
Every small business that you talk to these days says the same thing. It is much harder to make money than it used to be. While a lot of long term business owners may want to argue against that statement, it does pose the question of "how do you save cash when running a small business in the 21st century". Outlined below are 5 ways that we think small business owners can save themselves a bit of cash and also claw back some of that lost time.
- Use Freelancers
- Get an Answering Service
- Renegotiate Contracts Regularly
- Get a Virtual Office
- Use a Virtual Assistant
Make use of freelancers
Back in the old days you would have a whole range of staff to carry out all sorts of duties. You would have a whole accounts department looking after your accounting, a sales department looking after your sales and a production department looking after your operations. These days it can be cost inhibitive to have all of those staff but there are some quite viable alternatives.
Before deciding on what you can outsource to different freelancers it makes sense to try to break all of your tasks down into chunks. A lot of these tasks (like entering invoices or managing Adwords) will be pretty standard across many different organisations. These tasks are the easiest to give to freelancers. If you have tasks that are more complex or more strategic in nature then it may make sense to do these in-house.
Rather than having an in-house accounting team it may be an idea to think about outsourcing the clerical components to a decent bookkeeping company. You can then basically just use them whenever you need them rather than having to pay all of the time. All the latest cloud software (from companies like MYOB and Xero) provide access to your accounting information from pretty well anywhere and using a whole range of different devices and platforms.
If you are doing a lot of internet marketing, either through PPC or through organic SEO then it could be an idea to use an external digital marketing agency. There are a lot of good ones out in the market these days and some are really cost effective.
If you have some one off tasks that you need to have completed then you can look at putting a job up on one of the freelancer job boards. These boards include Freelancer.com, Fiverr.com and Odesk.com. It is pretty simple to join these platforms and they all have mechanisms for controlling how the work is done.
By cleverly outsourcing to freelancers you should be able to save up to 30% of the cost of trying to do those jobs internally.
Get yourself an answering service
Last century, if you were setting up a small business then one of the first people you would look at employing would be someone to answer your phones. This person also likely sat out the front of the office and managed your couriers and incoming and outgoing mail. One of the big problems with this approach was that whenever that person was away on leave, sick or even just taking lunch you would need to get someone else to step in and take over. The whole function almost needed a manager just to keep it working.
These days it doesn't need to be that way. Given the advent of the internet and the development of cloud technologies there is not as much of a need for people to be chained to a specific office. This then creates another problem, if the people don't need to be in the office then why do you need a receptionist there?
With a telephone answering service from a company like Virtual Headquarters you can have your cake and eat it. You can have someone who is available to answer your calls whenever they come in while you don't need to pay for that person when there are no calls coming in. Many of our customers report saving up to 40% of the cost of an internal receptionist by having an outsourced telephone answering service.
Renegotiate your contracts
There are some things that just keep getting cheaper every year, specifically telecommunications costs and outsourced IT costs. The problem is, if you don't keep on top of the contracts related to these services then the contracts will simply roll over every year or 2 years and you will end up being locked in to the same rate. Quite often the rate that you find yourself locked in to will be significantly higher than the current market rate.
You should keep a schedule of all of the major costs that are associated with running your small business and make a note of when all of your contracts come up for renewal. Just prior to their renewal it is worth getting in touch with your supplier and requesting a rate review. If you do your homework then there is a good chance that you will see a fairly significant drop.
Even if you are locked in to a long term agreement and you think that you are paying over the top for your service it is a good idea to talk to your supplier about renegotiating. It may well be worth their while to negotiate a lower rate if they can lock in your business for an even longer period.
Get yourself a virtual office
One of the biggest expenses for small businesses these days is the actual cost of a physical office. It's a bit of a vicious circle for small businesses, if you want to give the right impression to your customers then you need to have an impressive CBD address however that CBD address will end up setting you back quite a bit of cash. Also, it isn't just the cost of the office itself, it is the cost of the fit-out, the cost of the furniture and the cost of the technology. At the end of the day you can be up for tens of thousands of dollars for an office that you don't really spend too much time in.
There is an easier way. With a virtual address you can get a lot of the benefits of a physical address without having to outlay much cash. A virtual office will set you back about 1% of the cost of a physical office and you will get to use that address on your website, on your business cards and on your marketing materials. If you have a small business where you are out and about a lot then it really doesn't make a lot of sense to have a physical space that doesn't really get used. Another great thing about virtual addresses is that you can take your business national (or even global!) for very little cost and in a very short period of time.
You can also make use of your virtual address on a Google Places location. Once you have an address with us (or another supplier) any mail sent to your nominated address will be held for collection. What this means is that you can sign up for Google Places with your new virtual address and the postcard that is sent will be sent to your virtual address. Our staff will notify you when the postcard is received and you will be able to pop in to our office and collect the postcard with your activation code.
Make use of a virtual assistant
Research conducted in the USA showed that the average manager is spending around 25% of their time attending to admin related tasks. These tasks may be taking orders over the phone, completing online forms, maintaining spreadsheets or surveying customers. Imagine if you could get a virtual assistant involved with your business and you could claw back some of that wasted 25%.
Virtual Assistants from Virtual Headquarters are very cost effective. We charge only for the time actually taken to complete your tasks and we charge on a minute by minute basis. THat way, you only end up paying for the time taken on a project and not for the time that our assistants are out at lunch or when they are not at their desk. It makes a lot of business sense to make use of virtual assistants.
Hopefully these 5 suggestions help you to save a bit of cash in your small business and make more profit.