When you’re growing a startup or small business, every dollar counts. The more you can save, the more runway you’ll have to build your business and help it reach its full potential.
Although, I know, when you hear the word “cutbacks” it seems like a bad thing. Like you’re pinching pennies and making matters more difficult.
Thankfully, there’s a better way. Here’s a look at five practical money-saving strategies that can shore-up your business finances and feel hassle-free.
1. Go paperless and reach for the cloud
Let’s be honest. Storing documents in the office can be costly and time-consuming.
When you factor buying paper and filing cabinets to store documents, the office space required to store filing cabinets, and labor costs for employees to locate, retrieve, and re-file documents it’s an immense drain on resources
Businesses lose both time and money chasing papers when a better solution resides within the cloud. Given the proliferation of cloud technology, it’s easier, safer and quicker than ever to go paperless.
Your mobile phone, tablet, and laptop have all but replaced big, bulky devices like fax machines and scanners. Throw out the ancient fax machine and use a fax app to send and receive all your faxes digitally. Digitally sign PDFs online for free with the help of digital signature apps. Use productivity apps to create a paperless office by saving documents securely in the cloud and get onto more important business.
2. Save on business travel
International and domestic business travel can be costly. Business Travel News 2018 Corporate Travel Index suggests the average daily cost for meals, car rentals, and hotels for business travel in the U.S. rose to $325 per day last year. For many businesses that’s a conservative number and the figure rises as more business is conducted overseas.
However, business travel doesn’t have to burn a hole in your pocket. Cutback on business travel expenses by opting for more virtual meetings with apps that makes video conferencing frictionless like Zoom and GoToMeeting.
Next, select business credit cards with airline mile bonuses. The Chase Ink Business Preferred credit card offers 80,000 bonus points after you spend $5,000 on purchases in the first three months. While the United Explorer business card currently offers 40,000 miles after you spend $2,000 on purchases in the first three months. The best business travel credit cards will offer airline rewards, miles and cash back; and relevant perks.
3. Focus on entry-level hiring and outsourcing
Rock star employees aren’t necessarily already established and experienced. You can find high-achieving employees with less experience and a fresh perspective. Entry-level roles can cost less and bring balance to a top-heavy org chart. Outsourcing is a cost-friendly staffing option, and it improves access to talent.
4. Negotiate with suppliers
Suppliers are generally more open to negotiations than you may think. They’d rather negotiate a lower price than lose a customer. So, review your historical purchase orders, improve purchasing forecasts and negotiate lower rates with your suppliers.
Suggest discounts and annual rate locks for quick payments or buying in bulk. This will increase your profit margins and improve cash flow. You can also negotiate your office, retail or warehouse lease. Be careful not to trade a small rent reduction for a longer-term lease that lacks flexibility.
5. Reduce work hours and test a 4-day work week
Do you really need your employees in the office for 5 days every week? Or can you designate one day a week as a flexible working option so your team can work from home?
Keep in mind, “The 40-hour workweek is rooted in industrialism. When it was established, most people worked in factories and other manufacturing facilities. They started working when they got to work and quit working when they left. Working from home or outside of business hours was impossible.” Today’s modern technology advances make it easier than ever to work comfortably from anywhere.
By adding flexible and remote working options you can improve employee morale, save on office operational costs, and more. It also might just make your employees more productive! You can even cut the work week down to 4 days. Just by cutting one day out of the workweek, you can save 20% on your payroll.
6. Bonus: Hire a virtual receptionist
Many businesses still use a full-time receptionist to take calls, talk with customers, and act as the ‘voice of the company”. In doing so, they have to pay a full-time salary with benefits.
However, this is not required nor necessary in today’s modern workplace. Instead, you can opt for a virtual receptionist, and save tens of thousands of dollars every year – all while having someone to answer your phones 24/7!
Time and money are the most valuable resources for startups and small businesses. The more you can save in each area, the more opportunities you’ll have to grow your business. So, use these smart and effective strategies to painlessly cutback and position your company to succeed.
Parker Davis is the CEO of Answer 1, a leader in the virtual receptionist and technology-enabled answering services industry. Since 2015, Parker has been responsible for Answer 1’s strategic vision, senior level management, and equity creation. He believes that the application of data analytics, investment in technology, and fostering a positive company culture together create highly efficient and scalable growth companies. He has an M.B.A from Kellogg School of Management at Northwestern University and a B.A. in Economics from the University of Notre Dame. Connect with @answer1 on Twitter.