5 Ways Small Businesses Can Cut Costs and Save Money
Everyone is telling you not to overspend. “Save your money for the important stuff” they say. OK, sure… but what is the important stuff? Is it advertising? A beautiful website? Employee satisfaction? What? The more you ask around the more answers you get, because all businesses are different. What has worked for your buddy, will not necessarily work for you.
Therefore, we’ve compiled a short list of tried-and-tested measures that could save you money now and in the future. We’ve selected 5 simple things you can do to cut costs, without giving anything up or feeling like you’re holding back your plans for growth. On the contrary, you might be better off doing these things even if you have a generous budget.
Here’s how to save money and work smart:
1. Ditch old-school advertising for growth-hacker marketing.
Much of the initial budget in any business goes into marketing. The good news is that the internet has changed the way customers interact with businesses. You can now ditch expensive ads in favor of good customer care, inbound marketing, SEO, social media marketing, and any other “creative” techniques you or your team can come up with.
We won’t get into the details of what growth-hacking is, but we will tell you that it focuses on finding smarter, low-cost alternatives to traditional marketing, by analyzing customer data. In a nutshell, know your customers, meet them where they are, and give them what they need.
Your marketing doesn’t have to be complicated and expensive. It can be something as simple as setting up a form on your website to collect leads, answering your customers’ questions in the content you generate, giving people the opportunity to review your services/products, or making sure you’re selling the right thing to the right people.
Growth Hacker Marketing by Ryan Holiday should be mandatory reading for anyone looking to understand how advertising has changed over the past decade. It’s a short and illuminating read.
Oh, and make sure you’ve got Analytics installed on your website. To save money and get the most from your marketing, base your decisions on data, not intuition.
2. Outsource and go remote.
Employee costs can put a big hole in any budget, unless you manage your expenses well. That shouldn’t mean hiring less and overworking your staff (which will lead to low-quality services and dissatisfied customers), but adopting a more flexible way of working. We’ve asked around and come up with a few approaches that should lower your overhead:
- Keeping full-time staff to a minimum, and outsourcing extra work to independent contractors (if and when you need it).
- Cut “extra” employee expenses: stuff like free lunches and gym memberships. No one is saying these things aren’t useful, but only offer them if you can afford them.
- Embrace remote work. Not all types of businesses can go fully remote, but you should consider it anyway. You’ll save money on office space and other operating costs, your staff will be happier, and their productivity will increase. Win-win-win.
- Cut down on employee time when full-time work isn’t justifiable (like during summer or winter holidays).
3. SaaS is your smart, reliable and affordable friend.
Repeat after me: “the cloud is my friend”. All kidding aside, if there’s one thing that marketers agree on, is how important cloud tech is for businesses of all shapes and sizes. Instead of building or purchasing expensive software to manage the different aspects of your business (which can set you back tens of thousands of dollars), you can rely on SaaS (software as a service).
You use G Suite to stay organized, MailChimp or Klaviyo to automate your email marketing, PayPal and Stripe to secure online transactions, maybe HubSpot or Salesforce to stay on top of your marketing and sales strategy. Not to mention all the logistics and communication software that have become indispensable to a growing business. All these SaaS options require you to pay a monthly/yearly subscription, but they make your life so much easier.
Btw, if you need help integrating SaaS on your website, we can help.
4. Keep an eye on expenses, even little ones.
This should probably be the first thing you do, but we didn’t want to put it at the top of the list because it’s so obvious. That said, you’d be amazed how often business owners ignore the expense report until the situation forces them into it.
So, look at what you’re spending money on, and eliminate everything that’s not absolutely necessary. This is crucial when you’re starting out. You’ll want to keep yourself from spending money on stuff you don’t need. Take every item on the list, and ask yourself: is this providing ROI? No? Then it’s a luxury that you should save for later, when you can afford it.
Start with the 3 usual suspects:
- maintenance costs (like recurring office cleaning, expensive water coolers, super-expensive rent, etc.)
- meeting costs (limiting the number of people required to attend, switching to virtual or phone meetings instead of face-to-face)
- shipping costs (go paperless, renegotiate your shipping contracts – if you use shipping a lot, those few pennies you save can add up to big bucks).
5. No business is an island: create partnerships.
Make friends with other startups, create joint promotional campaigns with businesses in your area, even try bartering – you’d be surprised how many small companies are willing to collaborate this way. Cross-promotion is very effective, and quite cheap.
Our suggestion: be friendly. Instead of sitting in your tower, isolating yourself from the community, get out there and talk to people. You could find other business owners willing to accept your services as payment for their services, or people who do fun/interesting things, who see an opportunity in working with you, just as you see in them. Come on, don’t be shy…
Have an interesting proposition for NerdPilots? We’d love to discuss it. Get in touch.
Finally, the best way to cut costs and save money is to take an honest look at your list of expenses. Eliminate everything that doesn’t produce ROI. We suggest sticking to the good practices listed above even if your financial situation improves. You’ll grow your profit margin and prevent money trouble from surprising you later.
If you need help figuring out how to get the most from your low-budget marketing, schedule a call with us to discuss your situation in detail and brainstorm cost-effective solutions. No strings attached.
Do you have any other tips for business owners looking to save some money? What has worked for you? You can share your experiences in the comments below, and teach us all a thing or two.