So, you have your own business set up and a business idea you’d believe could be the next big thing. At least, something sustainable for you to get on with your life. But making money doesn’t mean you have to overspend in your capital.
All about managing your cost
Running your small business is something that takes a lot of your energy and at times, it feels quite impossible to stay afloat especially when you seemed to be paying through your nose all the time. The trick really is to manage your cost well because as a startup, your product or service might not be selling very well as yet. At times, it could be because of the time of the year where business is slow. So, what could you do to keep the cost low?
You would have considered moving your business online by now through e-commerce platforms or engines. But in going online, we do not mean only about your business transactions. Look for online applications that could actually help your business transaction. You might be using a free version with limited functions but perhaps using a full and paid version could be more cost-effective. After all, with more capacity and full functions, transactions are expedited and you could as a result save in cost and time.
Manage your space
After running your business for a while, you might realize that you do not necessarily need so much space in your office or building. This is where you can consider sub-letting it out so that you can earn some extra income. It might not be profitable but at least it helps to push your operational cost lower.
Go for cheaper manpower
One of the things you can do when it comes to manpower or staffing is to look for cheaper alternatives. Every permanent (full-time) staff you employ will have a long-term cost. Relook into your organization chart and look at areas that you might not need a full timer. You can then consider:
- Part-time staff – you pay them by the hour or on a weekly basis. Cleaners, accounts clerks and certain administrative posts could well be done by them
- Freelancers – Content writers, web developers, IT technical staff and even secretarial duties can be carried out by freelancers who are paid based on the project and assignment.
- Interns – This is one of the popular methods of hiring manpower if you are trying to keep your cost low. Interns are great help in administrative duties and operations. They are usually students who are completing their studies and are more than willing to get the jobs done.
Fix the leaks
Because your operations might not be too large, it is easy to spot the leaks (inefficiencies) and then get them resolved. If it means relooking into your product or service and even changing them, so be it! Think about whether you really need so many departments in your company and then it might make better sense to just close those that are not necessary.
This might not be the best option and maybe could incur initial cost but if you can outsource services like your Human Resources, Accounting and Payroll, it might prove more effective in the long term. In fact, many companies have ventured into this and have been very successful in saving cost because they no longer bear the commitment of staffing, overheads, rental and other payments.
Putting it all together
There are of course many other areas in your business that you can minimize in terms of spending to cut costs like transportation and entertainment. Those mentioned would be good starts and then you move along as you discover more and better ways to get there.