No matter how small your business is, you probably have more expenses than you would like; but, that is all part of the game when doing business. While you cannot get around having to pay for certain things, there is probably a way for you to reduce costs—you just need to take a closer look at how you are spending your money. Cutting costs means being able to pump more cash into the activities that will help you grow your business, not just the ones needed to maintain it. Here are some ways you can reduce costs and improve cash flow.
Track Every Dollar
The first step in trying to cut down costs is getting a clear picture of where your money is going. For the next three months, write down all your expenses. The more you know about your money, the better position you will be in to decide what can go, what needs to stay and what can be modified. You may be shocked to see how much you are spending on coffee, printer paper or other items that you really can forego or cut back on significantly.
Consider Cloudsourcing
Advances in technology have made it easier than ever for people to work remotely. If you are looking to cut expenses, you might consider cloudsourcing over hiring a traditional employee. With this model, you hire people on an as-needed basis and it will cost you much less than it would be to hire someone full or part-time. You can find all sorts of professionals from marketers to IT professionals.
The cloud, in general, can benefit businesses in a variety of ways. Services like the ScaleMatrix Cloud and Colocation Center can give you state of the art cloud colocation for your business that utilizes blended bandwidth with premium multi-homed connectivity, and an expansion capability of 155,000 square feet. Both small and large businesses can benefit tremendously from this service, especially in a day and age where a sizable amount of work takes place via the cloud. Don't get left behind when your company can take advantage of a resource as valuable as this.
Re-evaluate Bulk Purchasing
In most instances, buying in bulk is a recommendation to save money, but that is not always accurate depending on the situation. Sure, the price per item is much less than if you bought the item separately, but this is only a bargain if you actually think you will use all of said items within a reasonable time frame. In this instance, it can be good to just think about what you need today than in the future.
Combine Purchasing Power
One money-saving trend growing in popularity is pooling purchasing power with other businesses in your area, even the competition. The more you buy, the more you save. Forming these sorts of partnerships can add up to significant savings on items you need to buy all the time.
Re-evaluate Marketing Strategies
If you currently send a printed newsletter to all of your customers, perhaps you might consider going electronic. You will save on paper and postage. Instead of paying a printer for your fliers, make your own with a program such as Microsoft Office Publisher, which provides easy-to-use templates to create a professional look. When times are tight, advertising may be one of the first things you are tempted to cut, but it is important to maintain your efforts, even if you need to scale back on them.
Look Into Cloud Technology
These days, more and more businesses are moving to the cloud, and it may help you cut costs significantly. Remote data storage can eliminate the need for maintaining servers, purchasing software licenses and paying IT staff—all of which can add up to a big expense.
Considerations to Boost Cash Flow
If cash flow is becoming serious issue for you, there are some solutions to get the money in hand more quickly. There are many companies that provide a number of small business funder options, such as invoice factoring. In this scenario, the company pays you a portion of an outstanding invoice immediately and then collects the payment from the customer—you receive the balance minus any fees. Merchant cash advances may also be an option where a company fronts you money and you then pay them back by giving them a certain portion of your sales each day. These types of services come with a cost, however, and you need to carefully weigh the benefits against this drawback.
Kelli Cooper is a freelance writer who blogs about all things business.
