By Carol Tice
Getting more customers and revenue are the big focus for most small business owners. But there’s another way to grow your bottom line that’s easier than hunting up new clients.
How? By learning to cut costs and operate leaner. A dollar saved in expenses is as good as a new dollar earned, when you add it all up. Here are 3 ways to save money and grow your business.
1. Save money on market research. Solopreneurs and small business owners I meet often tell me they don’t have time to conduct market research, or that it costs too much money to hire a big firm. But without market research, you can waste a fortune marketing products or services that customers don’t want to buy.
There’s a low-cost way to do market research: Do it yourself. Recruit friends and family and buy them a pizza for taking the time to poll prospective customers, or consider recruiting business students who might need course projects to work on for credit. Set up an online poll and tweet about it. You can get some feedback, even without a dime of research budget.
Ask frank but open-ended questions: Would you buy this? If so, in what color or size? What does this class need to include? How much would you pay? Many entrepreneurs don’t want to hear that their idea isn’t perfect, but brave it and you’ll gain valuable information that can steer your business to success.
2. Don’t get complacent on recurring costs. It’s easy to accept basic monthly costs as an inevitable part of doing business — the bill for telecom, data storage, computer security, email marketing, and so on. But don’t.
Instead, set up a calendar to review each of these ongoing costs every six months to a year. New providers pop up all the time with lower-cost offerings, and new offers come along from existing providers, so make sure you take advantage. At the very least, take competing offers you spot to your current provider and ask if they’d match it. They probably will, to keep your business.
3. Plan ahead for one-time costs. Every business has occasional unexpected costs–the bathroom at your store floods, your delivery van breaks down, your hard drive dies, your website gets hacked and needs to be rebuilt. Budget for these and start saving up, instead of letting these fairly predictable occurrences create a cash crisis.
If you don’t have a cash reserve for one-time problems, you’ll end up incurring debt to cover them and paying interest costs. That drains valuable cash that could have been spent on sales and marketing activities to grow the business.
It’s hard to focus on where your business could save money in the rush of de