The first step towards business growth or financial stability is almost always cutting expenses. It’s easy but proactive. And it’s safe to say you’ll feel much more confident about your future when you aren’t worried about unknowingly overspending on recurring or one-time expenses. Yes, there is always more you can do to save money. But sometimes, the answer isn’t as clear as asking for inventory discounts or purchasing advanced equipment. Once you’ve exhausted the more obvious options, it’s time to get creative. Thankfully, coming with these strategies is a lot harder than implementing them. Most of them revolve around the relationship between money and time, or the undeniable importance of maximizing the use of your most valuable resources.
Here are four innovative ways to cut costs at your small business:
1. Don’t Outsource Everything You Can
Outsourcing is so convenient that it’s very easy to go overboard. These days, you can outsource everything from graphic design to delivery services. A big reason outsourcing became so popular is the natural, entrepreneurial desire to devote 100% of your concentration to revenue-generating tasks and spend your days doing what you do best. According to this perspective, anything you don’t already know how to do or just don’t have time for should unquestionably be outsourced. While it certainly makes sense to outsource a number of tasks, outsourcing virtually anything that isn’t a core responsibility might not be the smartest move for your finances.
You don’t have to try your hand at every new task. But rather than instantly outsourcing something unfamiliar to you, do some research first. The task might be more essential than you previously thought, so much so that it’s better to learn how to do it on your own. Researching will also just give you a better idea of what you’re paying for and what kind of quality you should expect for different prices.
2. Automate Monotonous Manual Tasks
Automation is geared primarily for businesses that spend considerable time performing the same manual tasks every day. Examples include the rate in which wholesalers send invoices or the amount of emails sent out by a real estate management company. Aside from a few minor details, all these invoices and emails are almost identical. Composing and sending them takes time away from your core responsibilities. Your skills are a resource that cannot be compromised.
Businesses of this nature should therefore look into invoice or email management systems. Invoice management systems are especially vital for companies that frequently deal with late-paying clients. Many businesses have reportedly found that sending more invoices at certain intervals increases the likelihood of being paid closer to the due date.
3. Don’t Pass Up Lucrative Opportunities
As you can see, time management is a common theme in cost-cutting strategies. This refers to not only spending the right amount of time on certain tasks but also choosing the best possible time to complete that task. Sudden opportunities to save money on crucial expenses should not be passed up. You might not have the cash to move forward but this is where companies like United Capital Source come in. Unlike most other alternative business financing companies or online business lenders, we can approve multiple types of small business loans when cash flow is on the rocky side, or when a great deal of operational funding is tied up in other expenses.
Once you are approved for a business line of credit, you can access extra cash whenever you want. And much like your desired investment, you should apply for a business line of credit when you are confident you’ll be approved for a significant borrowing limit and appropriate interest rate. This is perhaps the only business financing option that you should apply for well before you actually intend to use it. So, if your business is often presented with sudden but lucrative opportunities, apply for a business line of credit when your cash flow is in fine form.
4. Do More With Less People
Saving money means doing more with less people. It is usually cheaper and less time-consuming to train a current staff member to perform a task than hire a new staff member. For example, a restaurateur could pay his or her dinner crew a little more to stay later and clean the restaurant instead of hiring a private cleaning company. A retailer could pay a few sales associates a little more to manage inventory instead of hiring stock clerks. This strategy should be kept in mind when you are considering outsourcing a new task as well.
Sensible spending and time management are essential for business growth. These are the kind of things companies like United Capital Source look at when they approve business loans, as opposed to credit score or capitalization. When you can say that you are definitely not spending too much time or money on anything, you are in position for a very prosperous future.