Business

Cost-saving Measures for Small Businesses

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Cost-saving

All businesses want to make money and stay profitable. One way to do this is by increasing sales. The other is cutting costs.

As we focus on the latter, let us look at five useful cost-savings tips for small businesses in all industries.

Going Green

Many new business owners are reluctant to put in place environmentally-friendly policies in their organizations. One of the biggest reasons for this is the initial investment that it represents. Even though this might be true, the long-term benefit of going green far outweighs the preliminary financial burden on the enterprise.

One way for a firm to do this is to explore various financing options for solar energy. Several advantages come with this approach. First, the cost of solar power is at a historical low. As such, there is no better time than now to look into it. Second, alternative energy sources represent tax benefits and other regional and state incentives favorable to all companies. Finally, the return on solar energy is close to 15 percent, a much higher value than any other low to mid-risk investment.

Telecommuting

Not all people can work from home. Regardless of the type of business you have, the number of employees on your roster, or your customers, at least a few staff members will often have to go to the office or the client site. It is especially true for salespeople and site managers as face-to-face communication is essential to business success.

Yet, there are still different measures your firm can carry out to make sure people who do not have to be at the office do not go. One of them uses presentation and video conferencing tools like Zoom, Skype for businesses, and Google Meet. At present, these and other platforms have both the features and the flexibility to allow for the efficient running of most business processes.

A second option is to create a task-based work approach that focuses on results and meeting deadlines rather than methods and specific work schedules.

Marketing Expenses

Studies show that, as a rule of thumb, a B2B business should spend around two to five percent of its gross revenue on marketing. In case your company belongs to the B2C category, the number is a bit higher, between 5 and 10%.

For instance, if you are a starting entrepreneur on a small company with sales figures amounting to one million dollars per year, you would be spending anywhere between 20 thousand and 100 thousand dollars on advertising and promotional practices.

Of course, marketing your products and services is a prerequisite to increasing sales and business growth. But that doesn’t mean you shouldn’t try to get the biggest bang for your buck from your company’s promotional budget.

In this day and age, the best way for an enterprise to do this is by executing a powerful, well-thought-of online marketing or social media advertising campaign.

Cloud Computing

When we think about cloud computing, most of us picture giant data centers and server farms in a remote provincial town running 24 hours a day. We also think about storage. If we open an account on Dropbox, we will store thousands upon thousands of files, videos, and pictures from our special moments with families and friends. Google Drive allows both retail and corporate customers to do the same.

While it might be true that one aspect of cloud computing relates to the storage of data, many small businesses are not aware of another useful tool: the virtual compute engine.

As the term implies, a virtual compute engine is not a physical machine. Yet, it can serve as one. For an affordable price, any company can have a machine with any software, memory, and speed configurations for a specific task. Better yet, payment is only made for services rendered. You don’t have to buy this system. Rather, you are renting it any time you need it.

Employee Contracts

If you need a person to help you once or twice a month in the closing of your firm’s financials, why would you hire a full-time employee? On the other hand, if your business is based online and without a proper network system, you cannot make money, a full-time engineer or cloud architect would be more than necessary.

The modern business thrives on flexibility. And flexibility includes your staff. If your enterprise has a staff of ten, take the time to evaluate the need for every position and hire accordingly. Who knows, you might need all ten to be full-timers. But maybe you only need six or seven, and the rest can be part-timers, freelancers, or work on a per-project basis.

Five ways for small companies to save money are going green, telecommuting, saving on marketing, using cloud computing solutions, and diversifying employee contracts.

As the owner of a small business, you probably don’t have unlimited financial resources. As such, maximizing what you have is essential to success.

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