The number of new tech businesses is on the rise, but despite this, it is no secret that running a tech company can be expensive. While it is possible to start a tech business on a shoe-string budget, they often require substantial up-front investment and have large, on-going costs.
With cash flow being imperative to both the health and success of a business, it is essential for tech companies to find ways to save. But how can this be done? And where can you afford to cut corners? Below are the steps you need to take to reduce costs for your tech firm.
Work Virtually
Tech companies are all about innovation, so why not change the way your business operates? While most companies are still run from a traditional office, there is a trend in virtual staffing. Being tech savvy means your company can work remotely, reducing overheads. There are many different apps and software that can facilitate telecommuting, as well as tools that help you to track productivity – this is a common worry among business owners with a virtual workforce.
Hire the Right Talent
Your employees are your company’s most valuable assets and contribute greatly to its success or failure. However, the recruitment process can be long and expensive, so regularly hiring new staff can cost tech businesses a lot of money. To solve this, make sure you are hiring the right talent. Assess their skill set, discuss their ideas to see if they would like to progress within the company, and after offering them the role, provide great low-cost employee incentives to help reduce staff turnover and save your tech business money.
Operating Costs
If you think that working remotely would not suit your tech company, there are other ways you can cut costs, even when operating from an office or commercial unit. This includes going greener, turning off tech when it is not in use and switching energy providers to reduce utilities; avoiding printing or storing paperwork; choosing a shared workspace or cheaper office; using a competitively priced courier; and hiring freelancers or interns, which will reduce monthly wage costs.
Outsource Tasks
A tech company should be focussing on generating ideas and creating innovative products. However, regardless of industry, all businesses have everyday tasks that must be completed. This may include answering emails, posting on social media, dealing with customer queries, or bookkeeping. Although essential, these tasks can take up valuable business hours that would be better spent on core activities. To solve this, consider outsourcing. This will allow you to operate with minimal staff, keeping the wage bill low and saving time.
Use Automation
If the idea of delegating to another company does not appeal to you, then there are alternative solutions. You could consider automating processes, which would allow you to maintain control and complete tasks in-house while also saving time and money. Areas that can be automated include: social media posts, backing up data, auto-response emails, payroll and accounting, scheduling meetings and appointments, and paying bills.
Free Marketing Methods
How well a business is marketed can impact sales, the number of clients and customers, and thus, long-term viability. As such, the idea of taking a DIY approach to your marketing may seem odd, but it can work. In addition to real monetary benefits, there are many free marketing methods tech companies can utilise. This includes creating an email newsletter, having a testimonial page, starting a business blog, building a strong online presence, and running contests and challenges that can be shared on social media.
Always Negotiate
As stated previously, tech companies often encounter a lot of expense. From investing in new equipment to filing patents, running a tech business can be costly. One way to potentially reduce costs is by negotiating. Whether on office rent, invoice payment terms, supplier costs, or administrative fees, it never hurts to barter. Learn how to negotiate like a pro and you could see a considerable reduction in your business expenditure.
Smart Purchases
Although tech businesses often use the latest equipment, before buying anything, ask yourself the following questions: Does the company really need it? Can the business afford it? And is it a vital piece of equipment? If you cannot answer yes to all three, it may be time to consider other options. For example: Could you borrow or hire instead? What about sourcing used? Or is there a cheaper piece of equipment that would do the job? With a bit of research, you may find a more cost-effective alternative, boosting company cash flow.
Final Thoughts
Although owning a tech business can be costly, there are methods you can use to reduce expenses and boost cashflow. This could provide the funds needed to grow your business and help your tech company to become more successful. Try these tips today to save money and free up valuable business hours and see how your company could benefit.
