In your effort to boost sales are you at times neglecting the expense side of your business? As a small business owner, you need to capitalize on every opportunity for cutting waste to help boost your bottom line and generate cash flow.
- Hiring Interns: Many organizations hire contract workers to undertake internal projects when internal resources are unavailable. However, far fewer companies hire interns to do work that may be undertaken by a college intern. Working with a college or university and taking on board interns from relevant domains is a great way to achieve your targets at reduced costs. In fact young and enthusiastic college students can sometimes bring in fresh ideas which your business will benefit from. So by hiring interns you save costs and enhance the creative spirit of your business.
- Flexible hours and work from home: If you offer your full-time employees flexible working hours and the option of working from home, you could save in terms of office rent and overhead costs. The bonus to you is more satisfied employees who are committed to giving of their best in their own time and space.
- Marketing Budget Optimization: By focusing on tracking which marketing channels get you productive leads and those that do not, you can optimize your marketing budget. You can divert money away from media channels that are not yielding results and the cost savings from this endeavor can be significant. For example, if you find that you are spending phenomenal amounts on print ads which are getting you mediocre leads, you can redirect your spend from print media and focus your time and money on alternatives such as social media that could actually be driving sales.
- Form mutually beneficial alliances: If you’re a small business owner, you could team up with other small business owners for mutual benefit. For example, if you are a restaurant owner, you can team up with a local stationary supplier who provides you with discounted items in exchange for discounted meals in your restaurant.
- Negotiate: When negotiating rates, you can use your position as a business owner to your advantage. For example, if you’re an event planner you could negotiate a better rate with a food supplier by assuring her of repeat purchases.
- Conserve resources: Resource conservation may be as simple as cutting down on the use of paper by using electronic communication and storage devices rather than print-outs and paper based files. Electricity can also be saved through the use of energy efficient lighting and maintaining office thermostat at recommended energy efficiency settings.
With the above tips in mind, you could take cost-cutting to the next level by forming a team for the specific purpose of reducing company expenses. Employees can brain-storm ideas from how to negotiate better with vendors to getting more usage out of existing resources.
A sobering point to remember for any small business owner is the much touted statistic that more than three quarters of American businesses fail within three years of startup. Most small businesses fail not because the idea behind the business was bad, or that the founders were not smart or hardworking. Businesses fail because they run out of cash. To keep adequate levels of cash in hand waste needs to be identified and eliminated. Be judicious in how you choose to spend your money and constantly be on the lookout for opportunities that help you maintain your goals for cash levels.