Financial saving is crucial for small businesses, especially since most of them operate on narrow margins. Unless your start-up is the exception to the general rule, there is a high possibility that you are constantly working to keep your costs under control. Indeed, saving seems like a piece of easy advice to follow, but it is actually a challenging thing to accomplish for small businesses that usually find it hard to convert revenue into profit. Furthermore, it can be easy for small business owners to engage in needless spending, leading to bigger financial problems than necessary.
If you notice your business profits fluctuate wildly from time to time, it is likely an indication of overspending. As such, identifying the areas where you are overspending and cutting down on these expenses should be your main priority. Let us share how you can cut costs within your enterprise and maximise savings every month.
1. Move to a smaller office
For many budding entrepreneurs, a spacious office is ideal because it symbolises ambition and success. However, in reality, seeking out a large workplace during the first few years of your business is generally not a practical idea.
While a vast office space can give your business an air of prestige, leaving a positive impression on your prospective clients and employees, it can also cause your expenses to balloon in the initial years of your operations. Therefore, you should consider moving to a smaller workplace, so you can avoid paying more rent than you need to.
2. Re-evaluate your marketing strategy
Most small businesses spend a significant amount of money on advertising to ensure consumers are aware of the brand’s existence. They view the high costs of traditional marketing channels like newspapers, magazines, and radio as a necessary expenditure to promote and establish their brand. Although these channels are effective, they can be an impractical choice for a small business that is only starting out.
To avoid spending a needless amount of money on advertising, consider other low-cost alternatives, such as utilising search engine optimisation (SEO) techniques to grow your brand and attract traffic to your website. While this method will not guarantee an immediate impact, as SEO requires time and effort to achieve your marketing objectives, they are a cost-effective long-term marketing strategy that pays off in spades.
3. Try outsourcing non-essential work
A business cannot run without its employees. Indeed, employees are crucial to getting work done. However, at the same time, the costs of maintaining your employees – from their salaries to their insurances – can take up a significant chunk of your business’ budget.
You can consider outsourcing non-essential tasks, such as your company’s accounting and bookkeeping needs, to a specialised firm to reduce your employee costs. At Ackenting Group, we provide a suite of professional accounting services that can be tailored to suit your business’s needs. Let our seasoned accountants provide you with timely and accurate financial reports so you can always stay on top of your company’s finances.
4. Review all expenses, no matter how minute
Reviewing your expenses may sound like sound business practice, but it is often overlooked until a recession forces the company to re-evaluate its spending. Moreover, many entrepreneurs underestimate the amount they can save when unnecessary business expenses are removed. It may not seem like much, but minor cuts in your ongoing expenses can lead to significant savings over the long term. It is advisable to analyse any spending, no matter how minute, and cut things down to the bare minimum.
Conclusion
Trying to save additional profits for a rainy day can be challenging for many small businesses that are still trying to establish a foothold in their industry. Nevertheless, it is prudent for many start-ups to consider doing so, especially in light of the uncertain financial market due to the COVID-19 pandemic.
If you require any assistance on accounting services, feel free to drop us an email at johnwoo@ag-singapore.com or contact us at +65-66358767. At Ackenting Group, we offer a complimentary 30 minutes online consultation for us to better understand your business requirements.
