Business advice is great. Business advice for small business owners who are finding their footing? Even better. Tips for small business owners who want to make sure their finances are air tight? Now we’re talking!
A key factor in small businesses is learning to get your coffee from the local vendor instead of Starbucks.
Hear us out: Starbucks is amazing. But would you rather have Starbucks for a month and go bankrupt or have coffee from the local vendor and stay in business?
Right out of the gate, a bonus tip for small business owners: It’s essential to save at every possible avenue especially while you’re still establishing your business. Budgeting requirements, letting go of unnecessary add-ons and at the same time purchasing the necessary additions, all these decisions decide the financial future of your business.
We have looked around at various small businesses and compiled this list of 14 money saving tips for small business owners.
Like Effie Trinket, we really do mean it.
Tips for Small Business Owners
Tip 1. The greener, the better
We are not talking about the color. Rather, the Go Green movement and how you should inculcate it into your business. Key reasons for this are:
- The environment is better for it.
- Cost-cutting in nature. (10 points to Gryffindor for that wordplay)
- It’s a win-win situation for everyone involved.
- Propagating the right principles.
- Tying your brand identity to a good cause.
Your business should be built around ways to keep it environment-friendly. Some examples include minimal use of paper, eco-friendly disposal systems, etc.
Tip 2. Most meetings can be emails
With the advent of a worldwide Work From Home (WFH) situation, 2020 has seen enough memes on this topic.
We want to shed light on how this not only results in a grumbled employee but also burns a hole in your business’ pocket. The next time you call for a meeting, do a simple calculation of:
- The time spent on the meeting.
- The number of employees and their respective salaries per day.
Calculate the amount going into paying them to sit through one meeting instead of actually working. Now multiply it by the number of meetings per day/week.
Overwhelmed? That’s okay. Take a deep breath.
Now that you’ve realized what this is doing to your business, re-evaluate your decisions and cut down on meetings; both frequency and duration.
Oh and a side benefit – you’re avoiding grumbled employees!
Should we create a separate blog on tips for small business owners – the grumble free employee edition?
Tip 3. To barter or not to barter
If done right, the barter system can do wonders for your small business. Just ask the Mesopotamians!
Ever traded a chocolate in order to get more TV time as a kid? That is a barter exchange!
Barter means trading in kind.
How can this be beneficial for your small business?
First things first – you have to possess fair knowledge of the value your product/service holds. The same process works for identifying potential businesses to barter with.
Once identified, make sure both businesses are offering products/services of similar value. It is essential to carry out the barter on amicable terms and in good faith. This way, both businesses benefit from the barter and the relationship stays intact.
Tip 4. Hire fresh talent
Do you remember your first job ever?
The nerves, the excitement, the enthusiasm and the willingness to put your best foot forward.
Experience has its own charm. But the rigor and Can Do attitude that freshers bring to the table is unmatched. It will take some time to nurture them and educate them about your business and their role in it. Invest this time in them; their eagerness and adaptability will surprise you.
Some other benefits that come with hiring freshers with minimum experience:
- Basic pay grade – Freshers are hired at the minimum pay and this is where the money saving factor kicks in for your business.
- Fresh perspective – Their ideas and perspective can be the fresh set of eyes your business needs in order to thrive.
- Lots of work done in little time – Basing this pointer off of their capability to do so much more given the age factor.
Take our word for it and hire employees with minimum experience. Then sit back and watch the magic unfold.
Just kidding, small business owners don’t really sit back. Ever.
Tip 5. Retain your best employee
This is a golden rule for any business
Your employees are your biggest asset. Treat them accordingly.
Along the course of your small business, there will be a few employees who outshine the lot. Observe the growth of all your employees, understand their strengths and expose them to opportunities. And the employees who perform the best? Do everything in your power to retain them in your business.
We are not talking about special treatment or anything immoral/illegal.
Make sure to provide the right environment and growth within your business for these employees. They are the core of your team and they should be given their due. Understand what they’re looking for in the job and deliver the best you can, being the captain of the ship.
Tip 6. Third party contracts
There are certain departments in your business that don’t require a full-time hire yet cannot be carried out without the necessary expertise in the field. In such cases, the best possible alternative is to hire a third party offering the necessary services.
A common mistake that small business owners make – ‘’I can do this by myself’’.
We understand you’re only trying to save on costs. But you have to weigh out the pros and cons here.
Suppose, your accounting requirements are bi-weekly. Outside of that, there’s not enough work to hire a full-time employee. Hiring an accounting firm to take care of your book of accounts can prove to be beneficial to you as:
- It saves you the cost of hiring a full-time employee.
- Your work is being handled by professionals.
- You save the time and effort of having an in-house accounts department.
- You can focus on aspects of your business that primarily need your attention.
Tip 7. Operating expenses being the operative term
This tip focuses entirely on the quantitative aspect of money saving. You don’t have to be a financial whizkid to maintain a basic ledger of your operating expenses.
- A regular day-to-day check on expenses,
- Noting everything down and
- Tallying the expenses with the revenue
is imperative. It gives you accountability of your expenses and helps in decision making for the same.
Do you really need that machinery in this quarter? Can it wait till next quarter when you will be able to afford it without hurting the business? These are questions you should constantly ask; it keeps the business afloat in the short and long term.
Tip 8. Be pro trade associations
Conversations with like-minded people are always enriching. This holds good in the business world as well. A socially important tip among tips for small business owners.
Did you know? There are 27 associations in the United States specifically for small businesses.
There are specific trade associations for small business owners too! Signing up will open you up to:
- Networking with fellow small business owners.
- A space where you find people who relate with you.
- Building a strong network and helping one another.
- Industry knowledge, latest developments both locally and otherwise.
- Fresh perspective.
- Solutions from entrepreneurs with experience.
- Benefits privy to association members only.
- Exposure to the trade.
Research on trade associations and sign up for one that fits your goal and business.
Tip 9. Go paperless!
Yes, we already spoke about making environment-friendly decisions. Yes, we are going to discuss the usage of paper specifically regardless.
Aside from that horrifying statistic, here are some of the reasons we believe you should be cutting down on paper usage in your business to the fullest extent:
- Cost reduction – The cost of Paper and Printing Machinery is reduced.
- Reduced clutter – hundreds of files piled on desks all across the office is not a welcoming sight.
- Environment – Reduced paper is definitely the better option for the environment.
- Loss of documents – By digitizing all files, you’re avoiding the possibility of losing files.
- Digitizing – It also helps when your employees can work on files simultaneously.
Need we say more?
Tip 10. Coworking spaces
The total number of spaces is projected to hit almost 26,000 by the year 2022 – a 42% increase since last year, 2019 – Goodworks
The reason behind this surge? A record number of small businesses starting up. This is the Entrepreneur’s Era in India. A whole new generation of entrepreneurs are cropping up all over India and we couldn’t be happier about it! From solving problems to making current practices efficient, they are covering all bases and doing it with unmatched rigor too.
Hey, small business owner. We’re talking about you. What a star!
What about your workplace though? Being a small business owner, it is irrational to invest in an office space. The costs involved are massive and frankly, not worth it. Given the average number of employees, the space required and the duration, all you need is a temporary workplace where the team can meet briefly.
Enter the coworking space. It solves all your workplace problems and what’s better? The surge in these workplaces almost guarantees one in your vicinity!
Tip 11. Distribution process
In pursuit of excellence, we often complicate things. Do you agree?
Finding the simpler way and the easier way are two very different outcomes. Yet they are used interchangeably. Trust us, the simpler, the better. For everyone involved in the process.
Well, this blog on tips for small business owners has got your back.
When it comes to your distribution process, the same rule applies. We put so much thought into the product/service and neglect the distribution aspect. Make sure to look at it from a vantage point in order to understand the level of complexity. Eliminate any steps that you can do without and bring it down to a basic process.
A popular and efficient distribution process is drop-shipping –
Dropshipping works as an efficient fulfillment model. In this method, you are not required to hold inventory of your products. You tie up with wholesalers/suppliers for the products you wish to sell and upon confirmation of orders from the customer’s end, the products are directly shipped from the supplier’s godown to the customer’s address.
As a small business owner, your work is essentially to build an e-commerce website, incur few operational costs and marketing expenses. You save up on a huge chunk of capital that would otherwise be stuck in inventory.
Remember, your distribution process is supposed to make things easier for you and work accordingly.
Tip 12. Think open source software
Open Source Software is computer software that is distributed with a source code under a license. It is free of cost and can be customized based on the user’s requirements. These softwares are usually built by collaborative efforts of a community of coders and specialists in the software industry.
There are a range of benefits that come from using Open Source Software:
- Free Software – You pay nothing in order to use this software as opposed to using closed source software. Eg: Microsoft, Apple.
- Updates – As it is built and used by a community of coders, they actively update the software in keeping with latest developments in the software industry.
- Adaptability – The software, once downloaded, can be changed as per your requirements. This allows you to mould the software to your convenience.
Some examples of open source softwares are – Libreoffice, Linux, WordPress, Magento, etc.
Tip 13. One word – Interns
This one’s interesting! The supply and demand of interns has increased to the extent of multiple companies providing aggregator services for the same. A popular example is Internshala.
Why should you hire interns?
- Interns are freshers on steroids.
- They take up more than just clerical work.
- High performing interns can be prospective employees.
- Hiring them costs less than hiring an employee.
Hiring interns is beneficial to you and the intern in question. You get your work done and they get experience on their application. Win-Win.
Tip 14. Switch advertising to digital
Our last tip for you, cut down on traditional advertising. You know this already; traditional avenues of advertising and marketing are expensive. Something you can’t afford as a small business owner.
Lucky for you, we are in the Digital Era. So is marketing and advertising. The best part? It is surprisingly cost-efficient! Other benefits include:
- Your reach is not limited to geographical boundaries.
- Everything happens in real-time.
- Several tools are available to track the performance of your efforts.
- Did we mention it’s cost-efficient?
- Well, it is cost-efficient.
- Boosts brand identity and visibility.
- We are offering these services just a click away from you.
Write these tips for small business owners down, especially the ones you are yet to implement. We’d love to hear from you about how well these worked for you and any additional tips you have to offer.
Tip for small business to put into action right away!
Remember Tip 6 – Third Party Contracts? Tie that in with Tip 14 – Switch Advertising to Digital and reach out to us for all your digital marketing needs. We’re waiting to create a budgeted strategy tailored for your business!