From our experience, running a business need not cost an arm or a leg. However, we realize that entrepreneurs tend to compartmentalize their personal budgeting away from business budgeting. While it is true that you need to invest a sunk cost to get your business going, you should watch your business spending as much as (or even more closely than) your personal finances.
Here are some proven innovative cost saving ideas to cut costs and stretch your dollar.
Follow Procurement Best Practices
It is not enough to simply record your expenses and explain their practical use in the business. You need cost saving ideas to maximize cash flow. Often there are more cost-effective solutions to save money and you need to compare prices before making a purchase. Make it a habit among your team members to source for the most cost-effective solution and presenting their researched options to you before committing to a purchase. But who has time to do all that right, so save yourself the time and hassle and get quotations from ThunderQuote for free.
Just another tip: Assign your most trustworthy and meticulous team member to be in charge of all fund outflows. All proposed expenditure need to be justified to him and there should be no commitment to purchase before his approval, else it’ll be easy to overrun your budget without realising it till the end of the month or worse!
Use Free Advertising
There are many free alternatives to paid advertising. Getting paid clicks on social media platforms and Google are targeted and cheaper than the regular billboards, but they may still be expensive for a start-up who needs to cut costs for other business opportunities.
Blogging with good SEO keywording is one way to save money and get free traffic to your website and build your company’s reputation as a thought leader in your industry. Building your repertoire of articles will take a long process, but this is a long-term marketing strategy to build brand awareness.
You can accelerate your web traffic through email marketing and setting up a newsletter. However, buying email lists can be extremely expensive and easily 50% of the emails in the list are outdated. You can create your own email lists, but that will take a very long process. Manually finding 50 emails can take up to 4 hours. You should automate this process for free with TQ Prospector, which extracts 50 emails in 8 minutes. That saves you time to attend to your more important business appointments.
Run Your Business from Home
In many countries, a home office is legal and may only require a licence. Take advantage of this flexibility to save your rental and transportation costs. By home office, I also mean working from Starbucks and other cafes at your convenience.
If your business is really successful and your home cannot accommodate your expansion, look for co-working spaces such as Workcentral with all the amenities provided at a cheap cost or incubators like NUS Enterprise which provide free hot-desking spaces are great too! Once again, do your shopping and find the cheapest option that doesn’t burn a hole in your wallet.
Go to Conferences for Free
Oh I love this one! Usually conference organizers are understaffed because conferences occur very infrequently. And they tend to hire a lot of part-time working students to shoulder the heavy-lifting for them. Hiring part-time students cost money too! You can help them cut costs through some innovative negotiation.
Here’s what you can offer them: Tell the conference organizer that you have a team of friends who are willing to volunteer their help for free in exchange for participation in the conference. I did this for 6 conferences already, and every one of them were glad to take me in!
And here is the good part: Invite your team and friends for a free learning and networking opportunity in an otherwise expensive conference, at the cost of ushering or doing registration for a short time. You will gain a good standing as being resourceful and generous. So why not?
Get Sponsors for Your Own Events
While networking at the events you attend for free, you may meet people who find your services extremely valuable and they may want to sponsor you. I recently attended my friend’s book launch at a Harley Davidson showroom, complete with a sponsored test drive, sponsored catering and sponsored wines. How did he do that? He conveyed the vision for his book in a way that resonated with the vision of his sponsors’ values. His sponsors saw the alignment of vision and decided that sponsoring his book launch is the perfect way to convey their vision to the public. So it is possible! Be creative about getting sponsorship.
Buy Refurbished Equipment
You do not always have to buy new equipment if you are not operating your office as a showroom. A refurbished photocopier, cupboard and mini fridge may not look fancy, but they certainly do their job and saves you money. If you work in a co-working space, these may already be provided to you. Otherwise just find a thrift shop, buy in bulk and get a discount.
Don’t Hire Full-Time Employees
On the surface, this sounds harsh. But the truth is that you do your entire team a favor in the long-run. Hiring full-time employees can be expensive, and you don’t want a case where you put them out of job if the worst happens. Begin with interns and contract staff to help you with various projects within the business. Your interns will greatly value the experience you offer along with the allowance to pay off their student loans. That helps both you and your interns save money!
If you need a longer-term solution, look for part-time hires. These may be new mothers who need time to look after their kids or university students and other people in a season of transition. Hire a full-time employee only once your start-up has grown enough to need and afford one.
Be Lazy. Do It Once, Automate.
What business processes can you completely leave to a machine to handle? I wrote a full article about how you can automate your sales and marketing at zero cost. There are automation tools for almost everything. Write down all your business processes and Google search for tools that can do that 10 times faster than you. Typically, the cost is small relative to the time you save for the things you cannot automate, like meeting prospects and clients. Saving time means money making opportunities for you and your business.
Keep It Lean: Outsource
Anything apart from your core business? Outsource. Warehousing? Outsource. Delivery and fulfilment? Outsource. Graphic design? Outsource. Keep your business focused on your core product and lighten the load of your team with what truly matters. Hire consultants as needed on a project basis. This will ensure that you have more time devoted to your team and cut overhead costs and put your money to other uses.
Watch Your Cash Cycle
Take note of your accounts collectibles and payables, ensuring that you get money in faster than you pay out is incredibly important especially as a cash strapped start-up.
Even if your income and expenses look healthy, you don’t want to get catch in a situation where your cash on hand falls beneath what you require for daily operations! Read more about cash flow mistakes and tips on how to better manage your cash flow here.
Value Your Employee Time
Your employees typically spend 8 hours in office, with a lot of time wasted in meetings. Keep your meetings short! For an introvert like me, meetings drain my mental energy and that means less productivity for the rest of the day. Please spare a thought for the awkward geeky nervous nerds like me.
Rather than having everyone travel to a centralized venue for a meeting, just do teleconferencing, or videoconferencing. In my company we find Skype the most convenient solution to get our meetings done quick. An introvert like me prefers that actually.
Negotiate with your landlord. Negotiate with your suppliers. Negotiate for a barter trade. Negotiate for a longer payment period, cheaper rates and yes, an exchange of services.
Negotiate is not about getting all of the pie. Negotiating is about making the pie bigger. Often we don’t know what our counterpart really wants. We just assume that they want the cash. Take time to develop the relationship and know what they need. Perhaps you have something to offer to them that is of value. My marketing consultant wanted to revamp her website and I wanted an email campaign. Guess what? We bartered. And the cost savings we got could be put to other business opportunities.
Find a win-win situation for everyone to come away happy at the outcome and build the relationship.
ThunderQuote is the most comprehensive business services portal in Singapore, Australia and ASEAN , where hundreds of thousands of dollars of procurement contracts are sourced every month by major companies like Singapore Press Holdings, National Trade Union Congress and more.