Why do people start their own small business? Maybe because they’re bored of living the corporate life, or want to be their own boss, or they have a killer idea they want to execute, etc. etc. But, why do people run small businesses? I’ve heard a lot of answers to this question – passion, a wish to provide a service, making people happy, and so on. You know what I say to that? Bull! I know it’s great PR stuff and all the big economists say you should run a business with the ultimate goal of providing customer satisfaction and all that, but who are you kidding really? You run a small business because above all you want to make profits, and so does everybody else.
What are profits? Well you needn’t have gone to business school to know that profits are simply the income you generate, less the expenses you incur. Therefore, the less expenses you incur (see what I did there?), the stronger your coffers will be. I won’t talk about the income generation aspect today; you take care of that for now. What I will do is point out where you can cut costs so that even if your sales aren’t quite where you want them to be, you’ll still come out on top.
- Advertise online. The whole world is moving online, Smartphones, broadband, Wi-Fi, it’s all gone bonkers. Join in the fun! Web advertising is cheap, easy, and attracts a wide range of viewership that can be minutely tracked. On the web, you won’t just know exactly how many people were exposed to or clicked on your ad, but also their demographics such as age, sex, et al. This way you know exactly where your ad money is going, and whether or not it’s worth keeping the ads in place. Huffington Post shows you a few good ways you can do this.
- Time Management. Say you work a 5-day week, and your employees do the same. Have a chat with them, and see if they’re willing to work harder for 4 days, and stay for a little longer if they get an extra day off. If they’re able and willing, cut down your work hours, you pay less for electricity and per-day or per-hour charging employers, making the whole running costs significantly cheaper.
- Work from home programs. To further cut down on running costs and salaries, encourage your employees to work from home. You might not save on salaries but you do save on office infrastructure. This may not work across the board, but you’ll have fewer people who actually come to the office to work. And the people who do work from home, may appreciate the benefits and work even harder!
- Look for that bargain. When investing in long term assets such as cars, machinery, and furniture considers going down the second hand route. Used products are so much cheaper, sometimes you find absolutely insane deals, especially online. Even if you’re buying stuff like office supplies, buy in bulk and look for the greatest discounts, you’ll save a fortune this way, even though finding the best deal might eat up a little time. I found an app that could save you some time!
- Internship programs. Start an internship program if you don’t have one already. Students will want to work as long as they get a certificate of experience at the end of the day! It’s like getting highly motivated, hard-working, free, employees who are grateful for the opportunity to show off their skills! It’s a win-win really.
- Change Insurers and club coverage together. Sometimes, you can get too comfortable with one insurer, meaning you’re potentially losing out on a cheaper cost for the same policy elsewhere. Say my current workers’ compensation policy is about to expire, it would make more sense to approach a big insurance firm who offers a blanket policy for cheaper, for example The Hartford’s wide range of Employee Benefit policies, which can all be bundled into one mega-employee policy for cheaper.
- Outsource. There’s a lot of burgeoning talent in third world countries who’ll do twice the work at half the rate, take advantage of it! Patriotism is all well and good, but when the government is already charging you a tax to run your business, why not take a look towards consolidating your bottom line before you worry about employment opportunities and all that. After all the government is supposed to use those very taxes to tackle such problems right? You’ve already done your bit, let them do theirs.
These tips are sure to help you bring down expenses, meaning you can earn more, and buy that car you always wanted, or take that holiday you always thought you deserved, or buy some new toys! Or you could do the responsible, adult thing and expand your business with the increased profits and increase them even more, in fact, do that! More profits mean bigger toys!