Entrepreneurs and business owners are being more creative with their budgets. Now more than in more recent years entrepreneurs have had to stretch their dollars to ensure they get the most return on their investments. A few entrepreneurs and business owners shared their best tips for running their business on a tight budget.
#1 – Another Set of Eyes
My best budget tips for my fellow entrepreneurs and business owners would be to have a third party set of eyes look over your books with you. You have to be totally honest and transparent with them and you will see expenses you never saw before that you should cut and some you should increase. Find someone you trust that knows numbers and get to it, it will help more than you can imagine. We do this once a year, and it helped us clean up thousands of dollars in unnecessary expenses. It also helped us focus more money on certain marketing avenues that were working better than others.
Thanks to Ben Walker, Transcription Outsourcing, LLC
#2 – Offering a Bounty
How we cut costs and stayed under budget in our company this year was spotted by offering a bounty. I offered any team member that brought a cost savings initiative that was practical and effective a 25% bonus of the cost savings for that initiative for the first year that it is implemented. This has been effective in my current company and in my previous two companies that I have built and sold. In addition to the cost savings the impact is a team commitment to running a efficient and streamlined operation and keeping resourcefulness core to our company’s values. When suggestions for cost savings come from the team and are implemented by the team the outcome is team ownership and cost savings directly to the P&L
Thanks to Bryan Clayton, GreenPal
#3 – PR and Marketing
In my business I have cut my cost dramatically as I now don’t hire a PR and Marketing company anymore, as it’s very costly. We now do our own PR and Marketing , this has saved us a couple of hundred dollars a month, which we can now put in other business needs, we realise that it’s easier to do in-house PR and Marketing ourselves, there are so many online resources like Facebook Ads, Google Ads and online tips on how to get found by potential customers and getting into press etc and the expensive is less than a $100.
Thanks to Lenique Louis, Lenique Louis Jewelry
#4 – Cloudsourcing
One of the best ways for small businesses to reduce costs is to use cloudsourcing. This is the process of finding qualified professionals who
work remotely and for a fraction of the cost of a full time employee. These employees can be found online at sites like Upwork, Freelancer, Elance, and others. The best part about this strategy is that you can hire people for certain periods of time, based on your particular needs. For example, some businesses don’t need a full time graphic designer on staff year around. If cloudsourcing is used, a graphic designer could be hired for a specific project. The terms are disclosed at the beginning of the project, and everyone is happy. In the end, businesses can save a tremendous amount of money.
Thanks to Sean Hall, TekBoost
#5 – Finance Charges
A great way to cut unnecessary costs for any small business is by eliminating finance charges. Small business owners are often guilty of wasting hundreds or even thousands of dollars a month on expenses like credit card interest, late payments on loans, membership fees, and much more. If business owners can do a better job of staying on top of bills and paying them on time, there’s a great deal of money to be saved. There are several ways to stay ahead of the curve here. Try scheduling alerts online that will let you know when bills are due, or set up automatic payments. Take a look at membership fees for credit cards as well as processing fees where you pay for things with credit. Lastly, do your best to eliminate high interest debt as fast as you can.
Thanks to Marisa South, Vet & Pet Jobs
#6 – Office Space
As we continue evolving in the digital age, it’s important that small businesses embrace technology if they want to save money in the long run. Technology is advancing at a rapid pace, and that means processes are becoming more efficient. With this in mind, take a look at your office space. Is it the appropriate size, or could the same number of employees be situated in a smaller or more affordable office space? If your office size is perfect, maybe consider moving to a less expensive part of town. Day to day expenses are usually the easiest to trim away from. Another option to consider is going green. By this I mean eliminating paper from the office, which could potentially save thousands of dollars by keeping everything digital. Also look into energy efficient lighting, and make sure that all the lights are turned off before closing the office each day. This can really help out with the electric bill each month, and can end up saving a lot throughout the course of a year.
Thanks to Brandon Schroth, Florida Virtual School
#7 – Invest in Return
One of the smartest ways to run a business is to invest in things that will bring you a return. In the case of a restaurant, I mean things like the menu, ingredients, staff, and marketing. In order to save costs, restaurants should do away with the frills. Let’s use tablecloths as an example. They’re unnecessary and they add to the expense list, both for purchasing new ones and consistently washing them. Another way to save is by eliminating huge menus that use a lot of paper. Some restaurants have figured out ways to maintain a small core menu, while listing specials and other sections on a blackboard. This saves on printing costs and you can change up the menu whenever you want without having to worry about the expense.
Thanks to Kris Johnson, The Gantry Restaurant & Bar
#8 – Software License
It is inevitable that a business will need to spend some of its budget on software and online tools to help make the business run smoothly and life a little easier for their employees however you can be overspending on this and especially when you are just trying to get a venture off the ground. A great way to keep these costs under control is to regularly review the software you are using and licenses you hold for it. This goes for all software, paid online platforms or tools you may use. Make sure they are being utilized and are benefiting your staff and business in some way or get rid of them and reduce monthly costs.You might think that $20 a month for something isn’t all that much but cost that over a year and it soon adds up. Review the licenses when an employee leaves, oftentimes the software licenses aren’t updated and you end up paying for more licenses than you need. Also in regards to licensing, it is a great idea to review who actually needs access to each piece of software. Some employees may not need nor be using something you are paying extra dollars for each month.
Thanks to Anna Johnson, Petplan New Zealand
#9 – Start Small
If you’re looking to build a business on a budget, you’ve got to be adaptable, and not have a fixed notion in your head of what your dream business needs to look like on day one. As an example, I started my business in a spare room of my home, decked out with office furniture I got secondhand from Craigslist, and a bunch of laptops I purchased for next-to-nothing when a friends company upgraded their IT hardware. Before every purchase, make sure whatever you’re spending your hard-earned dollars on is going to give you a multiple-figure return on the investment. If it doesn’t, don’t spend your money.
Thanks to Travis Bennett, Studio Digita
#10 – Five Year Plan
Establish a five-year plan. When I founded my business, I thoughtabout where I wanted the business to be in one year’s time, two years’ time,etc… This gave me a rough idea for how to properly budget for expansion, andalso prepare for any potential pitfalls along the way. We started as asingle-room business with a small number of staff; ten years on, we now operatefrom a 40,000 sq ft facility and employ over 160 members of staff. We arecurrently in the middle of our next five-year plan, only rather than focusingon how to get off the ground, this one features discussions on purchasing athird building, television campaigns and how to generate an even largerturnover than our current £15m.
Thanks to Darren Green, Roller Blinds