7 Simple Steps for a Small Business to Save Money in a Down Economy by Jessica Hodges
Shoplet.com was founded with the small business owner in mind, so it’s no surprise we hear their concerns on a daily basis. Lately, we’ve heard quite a bit about the uncertain economy — a dangerous beast that must be confronted if he or she is to survive. Be proactive. Take a few simple measures to protect your business and shore up a balance sheet.
1) Focus on preserving cashflow / healthy balance sheet
Impeccable finances are crucial when money is tight. As a famous playwright once noted, “Never a borrower nor a lender be,” but when you must extend terms, collect promptly. That goes for clients, as well. Pay your dues on time to preserve your business relationships.
Don’t undertake risky ventures, either. Stick with what you know works and brings in money. Risk can bring reward, but in a time of economic uncertainty, it’s time to batten down the hatches and spend wisely.
2) Sell to your existing customers
Ah, yes, the good ol’ 80/20 rule. It can be applied to a variety of situations, but in a business sense (especially for e-commerce and e-procurement websites) it translates to 80% of your profits coming from 20% of your customers. In that case, focus on your clients/customers that are the lifeblood of your business.
Important: New customers are obviously important for longevity, and efforts should absolutely be made to accrue new business, but direct most of your attention to your loyal customers and you will reap the benefits.
3) Evaluate your recurring expenses
Other than the absolute essentials like rent, internet, and phone service, a re-evaluation of your business’s monthly or yearly expenses is in order. It’s time to focus on what is critical for your business to survive, the business supplies that really matter, and to seriously question the relevance of everything else. Don’t skimp on the necessities, but lose the costly extras.
4) Barter services
No one likes to spend money on something if they can get it for free, and a quid pro quo can be very beneficial for both parties. Not only that, but it can also be used to bolster blossoming business relationships as well as further cement friendly relations with your established connections. Just because the barter system is as old as dust is no reason to not consider it as a viable business option.
5) Join a forum/LinkedIn group in your industry to exchange ideas
Social networks are now a necessity for modern companies to remain relevant. Establishing a solid reputation/presence on LinkedIn and some forums related to your business interests will not only serve branding purposes, but will also add to your search engine visibility. Even an hour out of your day to communicate with your industry peers can be incredibly beneficial on several fronts.
6) Outsource what you can
Despite what you might think, interns do NOT like data entry. Their labor can be put to better use elsewhere, and if you’re serious about developing their talents then you certainly don’t want them pluggin’-n-chuggin’ in Excel all day long. You can outsource your low priority or tedious tasks through a number of website services like Fiverr or Odesk for pocket change. Understandably, you may feel better about keeping your office resources in-house, but it’s certainly possible to outsource and preserve your data’s security.
Some folks live for data-entry. Save time and money, and give it to them.
7) Don’t forget to energize / inspire your team
A frequently overlooked action item. Showing your employees that you care about their projects and development is an easy way to boost morale and improve their productivity. If they feel inspired and energized to tackle their assignments, they’ll be much more willing to deliver above and beyond what is expected of them.
Remember: if you make an effort to be a good leader for your team, they’ll respond in kind.
These may not all be groundbreaking ideas around, but they’re often neglected in boom times. Keep our cashflow tips in mind, and we’ll all make it out alright.
How are you cutting costs at your business? Tell us in the comments!