When you need to save money at home it seems simple. Cut back on take-out and cancel that gym membership, but how do business leaders save money?
In a company setting the same rule of reducing and canceling services still applies, but it is far more complicated. The repercussions of each money-saving change must be evaluated in a conscious effort to avoid negative impacts on profit.
This means changes must be well researched before they take place and data should be recorded to compare financial impacts both before and after the change is enacted. Data based comparison will always hold the truth about how effective money saving efforts are.
Regardless if a business is large or small, it is the leader’s responsibility to ensure that money is not being spent in ways that are unproductive or have room for improvement. Money can be efficiently saved within companies’ marketing, major expenses, and employment.
You just have to know where to look!
Marketing
If you are a business owner then you know that even the most amazing product or service can not gain traction without finding its way to the target audience. This is why marketing is a key component to so many companies and why it comes in so many forms.
The complication here is that many forms of marketing are expensive. Commercials, google ads, billboards, and radio ads can all run a company hundreds to thousands of dollars. Worst of all, those advertisements are only temporary and after some time they will be removed.
Social Media Platforms
Luckily, companies are currently living in the age of technology and social media. It may sound odd, but if you are looking to lower expenses around marketing it is time to consider social media platforms as business media platforms.
Roughly half of the global population uses social media currently and each of those individuals spends about two and a half hours on those platforms daily. Today the most popular platforms include Facebook, Instagram, Pinterest, Youtube, LinkedIn, Twitter, Snapchat, TickTock, and WhatsApp.
Each of these platforms appeals to a variety of demographics and they each offer the opportunity for you to open a free account for your business. With a bit of research, you can find what platforms fit your business best in terms of the population present on them and start creating content in ways that appeal to the platforms’ algorithms.
Many of these platforms offer paid advertising and it may be a more affordable option than a commercial or billboard, but you can also reach a large audience for free by simply creating interesting content and interacting with the community to gain followers.
This may take some getting used to and if any of these platforms are confusing to you consider this as a new job for employees that are within your marketing department and comfortable on these platforms.
Tip: This may not be the most viable option for every company so be sure to research your target market and the reach of social media platforms before poling all marketing efforts there.
Refer A Friend
Businesses are always looking to grow their customer base and that can be costly, but what if customers did that for you?
Incentivized referral programs can be an affordable way to expand your company’s reach. Consider that a customer buys a gym membership. In this scenario, they may tell their friend about it if the customer enjoys the gym, or they may not.
Now consider that a customer buys a gym membership and is offered a tempting discount if they get a friend to join. Now the customer will likely ask around their circle of influence and work to create a new customer.
This can even be taken a step further by offering an incentive for friends who were referred to become customers. Concerning the prior example, the incentive could be claiming a free gym training session for new customers who came from referrals.
If the deal is tempting and not too costly for the business then it can continue to extend to new customers indefinitely.
Partner Up
Creating partnerships with other businesses is an opportunity that should not be overlooked.
Partnerships with businesses in related areas provide a space where mutual benefits can occur. Businesses in related areas will share a target population, so it would be beneficial for companies to trade advertising space or referrals.
For example, a skincare line may partner with dermatologists who believes in the line. The dermatologist offers treatments with and recommends the skincare line to clients. The skincare line lists the dermatologist as one of the exclusive places you can have a facial treatment done with their product.
This partnership would result in people who trust the dermatologist trying and possibly purchasing the skincare line. Meanwhile, people who trust the skincare line may become new clients of the dermatologist.
Partnerships can work in a multitude of ways so get creative and as long as the plan is mutually beneficial with low risk most businesses will agree.
Big Expenses
Big expenses are inevitable when running a business. The workspace and necessary supplies tend to eat up more profit than you think.
The Workspace
There are very few businesses that can operate without some form of home base. Having a location for your business offers opportunities for meetings, group work, and it keeps resources consolidated in one space.
The question becomes, how much does it cost to have a location for your business and where can that cost be reduced?
Consider the electricity, break room supplies, and the amount of space available. Chances are you can save a lot of money by doing little things concerning these necessities. You can turn off technology that is not in use including lights, add a coffee machine in the breakroom instead of buying coffee for employees, and even downsize the office if it saves you money on rent.
The difference won’t be noticeable right away but over time these little changes can amount to hundreds or even thousands of dollars saved.
Tip: Your services can be worth more than money. If you need painting, maintenance around the office, or any other service see if the provider is willing to take a product/service from your company as a fair trade for their work.
Rethink Supplies
The amount and type of supplies you use are unique to your company, but that does not mean it is your only option. Take some time to assess what supplies are most costly and you will be surprised to find what simple solutions are available.
For example, printing double-sided can save on paper buying costs, and going digital can eliminate almost all paper costs. This is where the thought of going paperless and embracing technology comes in. Many companies are now using DocuSign as a way to reduce the use of paper, it not only saves money but also helps the environment…. win-win!
You can also reach out to suppliers and negotiate costs. The best-case scenario is they lower your cost and the worst-case scenario is nothing changes, so it is worth the effort.
Employees
As a business owner, one of the toughest decisions to make is letting go of a valued employee due to tight budgeting.
This decision is difficult, but it should not have to be the first choice you make when cutting costs. There are plenty of ways to save money concerning employees without losing them.
Outsourcing
Instead of hiring someone to fill a position that has a tendency to fluctuate in usefulness you can outsource workers online.
One time or sporadic tasks are common within a business, so the quickest and most efficient way to complete those tasks is with a freelance worker. There are sources like Fiverr, PeoplePer Hour, and plenty of individual sites that offer gigs in a multitude of expertise.
Within an hour you can locate someone who specializes in the area of work you need, pay them a one-time fee, and move on with your day knowing that that task will be completed.
Working From Home
Currently many companies are also learning how to work remote and know that many things can be done at home and the expense for an office space may not be needed. Depending on the type of business, it may be most affordable to have some or all employees work from home a few days a week. This situation saves space, supplies, and energy required in the office space. It may also be preferable to your employees.
This also opens the option of cutting back on work hours where necessary. If you are keeping track of productivity and sales data you may find that there are certain times of the day or days of the week that have little use or poor return rates. By cutting a few hours or a day off of each workweek the business can save money and employees will remain employed.
When responding to financial restraints, slightly decreased hours is almost always preferable to letting a useful employee go.
Rewire How You Hire
Hiring for experience is comfortable because you can be sure that you are taking on an employee who can perform the tasks you need, but the experience can be costly.
Experienced employees often start at a higher salary than those who are new to the workforce. Consider opening up applications to college graduate students even if their work experience is limited. If you thoroughly interview a graduate who is new to your industry and you find that they are intelligent and educated in the necessary field then give them the opportunity.
Being new to the workforce, they will likely start at a lower salary than experienced applicants and they will be driven to learn and prove their worth. Young employees can grow with your company and since it can be hard for inexperienced graduates to find work this situation is a win-win.
Smart and hard-working employees are valuable regardless of their experiences and recently graduated employees may have an edge on new technology.
Every business is different and so are the areas in which they can save money. By taking the time to evaluate all aspects of your business you will find that the suggestions here are applicable and over time you will see these changes save money. Be sure to constantly reevaluate ways to save and get creative when you face a financial problem because there are multiple solutions.
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Citations:
- Henderson, G. (n.d.). How Much Time Does The Average Person Spend On Social Media? Retrieved October 08, 2020, from https://www.digitalmarketing.org/blog/how-much-time-does-the-average-person-spend-on-social-media
- 27 Money-Saving Tips From Successful Small Businesses. (n.d.). Retrieved October 08, 2020, from https://www.americanexpress.com/en-us/business/trends-and-insights/articles/27-money-saving-tips-from-successful-small-businesses-annie-mueller/
- Council, F. (2020, March 25). Council Post: 15 Smart Ways You Can Save Money As A New Business. Retrieved October 08, 2020, from https://www.forbes.com/sites/forbesbusinesscouncil/2020/03/25/15-smart-ways-you-can-save-money-as-a-new-business/