If you’re a small business owner, your daily struggles often revolve around expenses. As a basic rule of thumb, 10 to 20 percent of your revenue should be invested into marketing if you expect to grow your business—but that’s always easier said than done. It’s not an easy margin to manage.
Here’s some money advice: Knowing when and where to cut expenses can make that margin a little more breathable. Most companies can cut 10 percent of their operational costs without impacting business—at all.
So where can you save money?
1. Organize Your Office Supplies
It may seem basic, but it’s easy to save a few dollars with some smart shopping.
- Are you using an office supplies vendor to stock your desks? If so, you may want to shop around for competitive prices and deals. Also, don’t be afraid to barter to meet your budget.
- Online and third-party vendors from stores like Walmart and Amazon can often offer better prices than traditional big-box vendors.
2. Optimize Efficiency
Are you using your office square footage to your advantage? Think of all the expenses of an office: electric utilities, heat/AC, water, rent, etc.
- If your office space is going to waste, try a virtual office. Without the daily facetime, you’ll have to put in a little more effort to boost team morale, but your budget will thank you.
- Do you have a significant amount of unused space? Lease out your extra rooms to another business, or even an individual, to maximize your rent return.
3. Maximize Skill Sets
A team is only as good as its parts—and its expertise.
- Watch where you assign work, and don’t give assignments to people who aren’t a strong match for the tasks. Your sales leads shouldn’t be responsible for crunching numbers, of course, but also consider designating high and low-level tasks to respective high or lower-level employees.
- As a small business, you likely have a few “jack of many trades” employees—and that’s okay. But remember as you grow, when you play to your team’s strengths, you’ll find that productivity rises all around. That’ll save you money in the short and long term.
4. Modernize Your Marketing
This may seem counterintuitive—why examine your marketing costs when you’re trying to maximize your reach?
If your paid advertising is wildly successful, that’s fantastic. Don’t cut things that are working well for you. But if your returns aren’t what you’d like them to be, don’t miss the opportunity to look into less costly tactics.
- Explore the power of email marketing. The average email marketing campaign generates $44 for ever $1 spent — that’s a 4400% ROI.
- Encourage digital engagement through online reviews. Whether you’re posted on Yelp, or you have product listings that need ratings, incentivize your audience to share feedback on your services. Consumers like to hear from other consumers more than they want to hear from you.
5. Minimize Time-Wasting
Remember that saying: time is money. Properly using the workday can lower your business costs, so make sure you and your colleagues are using your hours wisely.
- Try setting 30-minute timers for simple but draining tasks. Sometimes, a ticking clock is all it takes to encourage some hard and fast productivity.
- Schedule timely meetings and adhere to the agendas. Meetings can slip into overtime before you know it, but by sticking to a setlist of topics, you’ll minimize wasted time.
6. Explore Virtual Tech
How much of your business budget is allotted for expenses like travel? How about document storage?
- If you’re trying to cut costs, flying to another city to attend a meeting is an expense you can’t afford. By moving your lower-profile meetings to virtual meeting spaces like Skype or Zoom, you’ll maximize both time and money.
- Collaboration tools like Google Drive or Basecamp can help increase efficiency and accountability. Plus, they’ll make collaboration between your teams far easier—especially if you decide to take the virtual office route.
7. Narrow Your Scope
This is one of the best techniques you can use to improve your bottom line. As a small business, it’s important to find your niche and stick to it.
If you find you’re casting a wider and wider net, rein yourself in and take a look at where your company is performing best. Taking the time to reset and refocus can help your business grow stronger in the areas where it should, and help avoid carrying costly weight in areas that aren’t your strongest suit.