A very common trait of successful business leaders is the ability to spend money wisely and effectively. Some business leaders might even argue that this is the most important skill for running a small business altogether. This is partially because cutting costs and getting more value out of your resources is not as simple as an outsider might think. If all you had to do to balance a budget was raise prices, trim your marketing budget, or buy used equipment, it’s safe to say the small business failure rate would be substantially lower. A true spending expert steps outside of the box in order to avoid unnecessary sacrifices, like layoffs.
Though improving cash flow is usually the main goal, plenty of successful business leaders will admit that they moved to cut costs primarily for peace of mind. Rather than spending their days wondering if they were being burdened by wasteful expenses, they could concentrate on doing what they do best.
Here are three overlooked ways to cut costs at your small business:
1. Get The Most Out Of Your Team
When your team is already on the smaller side, reducing staff is likely the last thing you want to do to cut costs. An alternative solution is doing more with less people, or making the most out of your team. Depending on the tasks at hand, it is often much cheaper to train an existing staff member to do something new than hire and train an entirely new staff member. Think of all the responsibilities that are handled by outsourced labor or other private companies. There may be a few responsibilities that could be handled by your existing staff members for much less money. A restaurant, for example, might want to keep its dinner crew on staff for a little longer instead of hiring an outside cleaning service. Retail stores could take a similar strategy by giving existing salespeople a little more money to label and organize inventory rather than hiring stock clerks.
It’s extremely difficult to get the most of your team without proper training. The more time you devote to training a new recruit, the less time it takes that recruit to directly contribute to the company’s revenue. As the previous paragraph suggests, this extra time could be used to teach the new employees just one or two additional skills that would have otherwise been outsourced to a private company.
Younger businesses might not have the resources to take on new hires while demand is stagnant or slow. Companies like United Capital Source, however, can provide the funds to cover the increased payroll and other associated expenses (new computer monitors, desk chair, etc) at almost any point in your financial cycle. Unlike banks, we have no issue approving smaller business loans, and numerous programs can be approved during lean periods. With programs like a revenue based business loan (business cash advance), you could gradually pay off more and more of the debt as revenue increases and pay less when revenue stalls temporarily.
2. Consider If Size Truly Matters
You may have noticed the increasing popularity of shared work spaces like WeWork. It’s not a coincidence that this is the same time in which food trucks are becoming more popular as well. Entrepreneurs are finally realizing that larger physical spaces are no longer mandatory for professionalism. You don’t need to have a big office to be taken seriously or to work with bigger clients. Shared work spaces might not be the right choice for every company. If you’re not sure, consider how big of an impact the benefits would have on your budget. Many companies made the plunge after concluding that they’d be able to get more done if they were not confined to four walls all day. Others concluded they would save big on utilities and office equipment.
3. Work With A Company Like UCS
Companies like United Capital Source were created for business leaders who prioritize smart spending and getting the most for your money. Lower interest rates can be compared to reducing staff. On the surface, they both seem like the easiest ways to save money. But what are you sacrificing in exchange? The business loans we offer at UCS are worth every penny. Flexible terms significantly increase the likelihood that your investment will be carried out successfully and give the business leader more time in the day to focus on generating revenue. Our business funding experts will happily provide advice for balancing your budget during and after your repayment process.
And when you pay off your first business loan with UCS (even if it’s a small one), you will almost certainly become eligible for a second, potentially larger round of funding. Any successful business leader will vouch that in the small business world, long-term relationships with the right people are priceless. A single repayment term will gain you a trusted partner for the rest of your career.