A penny saved is a penny earned, as the old saying goes.
For small businesses and startups operating on a shoestring, even small savings can make a big difference to the bank balance at the end of the month and the bottom line at year’s end.
Here are some tips for trimming your costs.
Keep it down
New company car, bigger office… whoa there! Start by pledging not to increase your spending until you’ve experienced a significant rise in revenue, Business Benchmark Group strategist Stefan Kazakis advises.
“Have a No Overhead Growth” policy as a percentage to revenue in your business,” he says. “If you don’t increase sales, then don’t increase the overheads.”
Get out your bills and spend a few hours on the phone comparing prices for the goods and services you consume regularly, Grant Field, chairman of MGI accountants and business advisers suggests.
“Sometimes even just letting your suppliers know that you’re looking around will be a good reminder they are providing you a service that needs to meet certain expectations and you might see them step up their efforts or offer a good deal as a result,” he says.
Sometimes even just letting your suppliers know that you’re looking around will be a good reminder they are providing you a service that needs to meet certain expectations...
Sharing is saving
An outgoing shared is an outgoing halved – so get creative about ways you can team up with non-competing businesses to pool resources and get more bang from jointly spent bucks, Crowd Media managing director Judy Sahay suggests. Think shared office space, equipment and advertising and marketing that ‘piggybacks’ the campaign of a compatible product or brand.
“Look at what is happening in the world around you and see if you can tie your business into local events and trends, just to get your name out there,” Sahay says.
Walk on by
Clocked those endless advertisements adjuring you to reduce your tax bill by buying goods and services before June 30? Walk on by, small business owner Elizabeth Kingston, founder of Kingston Human Capital says.
“If your accountant hasn’t advised you to go and spend your hard earned company dollars before end of financial year, don’t buy in to the marketing that you are pummelled with, from April to June each year,” she says.
“Sure, go ahead and purchase something if you need it, but don’t buy just because the marketing messages you’re receiving are telling you to.”
Middle range spending
And if a purchase is necessary, look for something that’s decent quality and does the job, not bells and whistles you don’t need and won’t use, Kingston adds.
“Sometimes we get caught up in the emotion of buying a great printer or something of the sort – remember you often don’t need a top-line product, you need a functional item,” she says.
Sylvia Pennington is a Brisbane-based freelance journalist who writes about small business, information technology and personal finance.