Small businesses are extremely prone to failure. That sounds like a harsh way to start this discussion, and I suppose it is, but it’s just the reality of the situation. Failure is a major part of the harsh reality of business.
And smaller, independently run businesses are more at risk than big corporations. For the most part, they’re unlikely to have the security, the preparation or the skilled workforce of bigger companies.
Above all else, the most important factor here is almost certainly money. Generating enough of it to start a small business in the first place is a pretty big ask in itself, but using it effectively, and avoiding landing the business in financial danger is a whole other story.
If you want your small business to stick around, you have to know how to save money. If you can learn that then you’re already minimizing a lot of your risk. And we’re here to help with that, so let’s have a look at a few ways your business can save.
1. Be Smart About Advertising
When it comes to advertising your business, you need to pick your battles. Advertising is very expensive and you don’t need your business displayed on every billboard in a major city and every television station.
Of course that would help, but the price isn’t worth it. Analyze your businesses demographic and find out where the people who will be making avail of your service spend their time. What TV stations they watch, radio stations they listen to, places they like to visit.
Target your advertising in those places and also, make good use of the internet. Traditional media and advertising isn’t dead, but online is probably where most of your business will be generated in 2020. Find out what websites and social media is used by your demographic and apply the same principle.
2. Use Freelancers
Once again, this is an advantage that not every business had such easy access to in the past but which is very readily available now. The freenlancing industry is huge and there are numerous sites where you can find skilled freelancers for pretty much any job.
There’s many benefits to hiring people on a contract basis, one of which is that it’s significantly less expensive because you only have to pay them for a specific job. They’re not technically employees, which means that you don’t have an obligation to them beyond the single contract.
You can build up working relationships with these independent contractors and not have to worry about putting them on your payroll on a permanent basis. This is how these freelancers like to operate anyway so you can rely on them not to try and alter that working relationship.
3. Minimize Paper Usage
And yet again we come to a very modern advantage. When you look at the big picture it becomes pretty clear that this is a great time to have a small business because we’re in a digital age and an online age, which makes saving money a lot easier.
Something that businesses spend way too much money on is paper. Going back a few years, you had to use paper for everything. Communication, keeping records, paying your employees, you needed so much paper.
Now you don’t. Some industries are still hanging on to the past and insisting on using paper, but for your own records, for your own payments and invoices, you shouldn’t waste money on it. Do it all online. There’s software and online services which can help with that.
4. Make a Strict Budget
This is easier said than done but it’s not impossible if you plan realistically. Everyone should have a budget. Every business, every family, every individual even, budgeting is essential and it’s how you are going to make sure you have money when you need it.
I would suggest budgeting on a monthly basis. Make sure you account for rent, for supplies, employees and freelancers, insurance, and emergency fund and I would suggest having some left over just in case.
Be diligent with your budget, do not allow yourself any unnecessary spending and know every essential payment that you have. If you can prove that you know how to maintain a good credit score, other companies and your customers will want to work with you.
5. Consider Working Remotely
I mentioned rent in the above point, but consider how much money you’ll save if you don’t have to pay any extra rent. First thought here, maybe you can run your business from the comfort of your own home.
Lots of people are already doing it. Look at the freelancers you’d be trying to hire, the vast majority of them are working at home. Many small businesses have an office purely because they think that’s what they’re supposed to have.
But you would save so much money on rent, office supplies, maintenance and a number of other expenses too. It can be tough to get accustomed to working at home, but it will be worth it in the long run.
If you don’t pay attention to your finances and if you don’t know how to effectively manage your money, your small business will follow apart. Follow these steps and you will put yourself at a massive advantage.