By Megan Totka
“Spend less, earn more” sounds like a simple enough equation. But few business owners know how to turn those thoughts into action properly. As a busy business owner, you already know the less you spend to keep your company running, the higher your profit margins will be. Learning how to cut unneeded expenses is the often elusive key. The U.S. Small Business Administration says that small businesses create about two out of every three new jobs in the U.S. every year. Now that 2019 is here, it’s the perfect time to rethink your business budget and implement ideas that will enhance your bottom line. Here are five ways you can start.
Reevaluate Staffing Needs
Small businesses often see peaks and lulls in the workflow. This may mean you are paying unneeded salaries during the slow season. Make sure to evaluate your staffing model, so your salary budget pays employees according to your workflow. Let’s say, during an undemanding time in your business, you have a staff of 70 full-time employees but only need 50. Perhaps you could then ask if there is anyone who would like to work part-time. You may find that an employee is looking to pursue a venture on the side, take some college classes or just wants to work less. These eager volunteers will make the process much more comfortable.
Another option is to replace some full-time employees with freelancers. You will likely pay a higher project or hourly rate. The benefit, however, is that you can spend as you need to for work that is produced. Additionally, contracting a freelancer leaves you unaccountable for social security taxes or benefits other employees require. This arrangement may have you finding that the savings outweigh the higher rates for projects and hourly work.
Use Caution When You Turn to Loan Financing
Be careful with your loan options! One of the ways many businesses spend otherwise needed funds is due to weak research. There is no one size fits all small business loan, and you must have payment and finance goals that meet with your lenders’ abilities. Make sure to use a loan calculator to determine how much you can afford and how much interest you will pay. A loan calculator allows you to secure financing without spending all of your revenue on fees and high interest rates.
Allow Employees to Work from Home
Some traditional business owners are uncertain about allowing employees to work from home since they feel they may have less control over their team. However, if you’re willing to let some of your employees perform their job remotely, you can save a good chunk of change. When you have staff members who telecommute, it may mean you can move to a smaller office space. This saves money on rent and overhead due to generally smaller utility and service bills. You also may not have to purchase as much business equipment.
Focus on Marketing Online
As you work to grow your business in 2019, it’s imperative to recognize the importance of marketing online. If your company doesn’t have a social media presence, make sure you create one. A reputable marketing agency can take care of all your online platform needs. Or, it may be worthwhile to hire an in house media specialist that concentrates solely on keeping all your social media interactions up to date. It really all depends on who your target audience is, and how media-driven your field may be. However, every company needs to have a social footprint if they want to be found by prospective customers. Additionally, a well-written website with search-friendly content will drive traffic to your site organically. Social media interaction isn’t a fad, and it’s one of the most powerful ways you can connect with customers in this digital world. Every business needs social media if they want to improve customer service and boost their growth.
It costs money to generate invoices and reports, and it costs, even more, to mail those out. Aim to implement an electronic billing system that will not only save you money but reduce your carbon footprint. Store those documents electronically to help you avoid spending money on ways to physically store paper.
It’s simple. When you reduce the money going out, you can keep more money in your pocket. These steps will help you look forward to a more prosperous 2019.
Megan Totka is the Chief Editor for ChamberofCommerce.com. ChamberofCommerce.com helps small businesses grow their business on the web and facilitates connectivity between local businesses and more than 7,000 Chambers of Commerce worldwide. She specializes on the topic of small business tips and resources and business news.
Cutting business costs stock photo by Palto/Shutterstock