In many ways, small businesses can be considered the “lifeblood” of economies all over the world. While large corporations certainly are integral to the global economy, the truth is small businesses are extremely important in terms of job creation and overall innovation. Of course, they also don’t have the resources to weather economic downturns the same way large corporations do. Many entrepreneurs want to know more about what they can “trim” in terms of their small business, without truly understanding what they can do without.
It can be tough to think about cutting costs, especially during a time when it seems like the odds are stacked against you. Your business might already be operating on a low profit margin or have some tough competition to consider. However, there’s always a way to improve your bottom line. Here are some smart ways you can cut costs for your small business.
Outsource Your IT
There’s no question: cybersecurity is extremely important for businesses of all kinds. It’s absolutely vital to consider cybersecurity if you are dealing with sensitive consumer data, or valuable intellectual property. However, you might find that your in-house IT team is costing your company too much for it to even survive, much less thrive.
You may want to consider outsourcing your IT to a firm like Mustard IT, which in turn can give you significantly more time to focus on other aspects of your business. If all goes well, you may find that your IT issues are still addressed in a timely fashion and your small business has more cash to invest in other areas.
Reconsider Your Office Space
If your small business is successful, it can be tempting to move into a luxurious new building with plenty of office space. However, the rent might eventually affect your bottom line more than you previously thought, especially if you aren’t signing enough new clients to keep up with expenses. Given this, you might want to reconsider the way you use your office space or move into a space that’s more cost-effective, even if it isn’t as impressive.
Let’s say you’re hiring more people than ever before, and your company is expanding. While it might not sound like the most attractive solution, you may want to consider using spaces for more than one reason. While it might be a momentary inconvenience, you may find it encourages collaboration and transparency. Either way, rent can be a huge drain on any small business, and you should always be wary of spending too much money on office space.
Cut Down on Marketing Costs
Small businesses must get the word out to the consumer to let them know they exist, but there are innovative ways businesses can market now without breaking the bank. Let’s say you’re a business that has relied on an expensive ad agency for years, and they have been producing results. Have you ever considered that you might be able to revamp your marketing campaigns and save money? You might also want to consider pivoting more to social media marketing, as well.
Ultimately, marketing is an important part of any business. If your marketing efforts are central to your business model, this might not be optimal. Of course, this is not to suggest that you ditch your world-class marketer for a local freelancer with no experience. However, there are steps you can take that can be extremely effective and aren’t costly. For example, you may find that repurposing old content for more traffic, or using new free marketing tools, can be extremely productive with respect to finding new customers.
Focus More Than Ever
If you own a small business, there’s a good chance you understand that it isn’t smart to always accept every project. You might think it’s an incredible opportunity to work with a certain client, only to find it’s a complete nightmare that’s draining all your resources. If you’re serious about cutting costs, you should consider focusing your skillset on your “bread and butter” clients, rather than trying to diversify.
For small businesses constantly trying to grow, it can be tough to decline a client that will bring you a significant amount of money. You should take the extra time to make sure this customer or client knows exactly what they want, so your employees can deliver. If it seems like this is unclear, you should turn back to what your small business is known for and deliver better than ever if you’re serious about cutting costs. You might find that a nightmare client can destroy employee morale, which is the last thing you want to do during a time when you should be saving money and improving employee productivity.
Your small business should always be growing, but that doesn’t mean it needs to spend more money. Entrepreneurs often want to spend money on aspects of their business that aren’t central to their success – whether it’s a plush new office at an address that suggests “status”, hiring an award-winning ad agency that doesn’t truly understand what their company has to offer, or the customer they should be targeting. Even large corporations make massive marketing mistakes, and this is a mistake many small businesses simply cannot afford.
Entrepreneurs and business owners should take the time and effort to understand where exactly they should trim the fat, and why. It might take significant research to figure out where money can be saved, but it just might be the reason your business survives when the competition doesn’t.