How to Make Cost Savings in a New Business
If you’re starting a new business, then you should be aware that there are two reasons that most businesses fail. The first is addressed by the Lean start-up philosophy, pioneered by Eric Ries: businesses fail when nobody needs their product or service. The second is widely well known: if your cash flow runs out, then your business will likely fail no matter what your profitability is. One excellent way to keep your cash flow under control is by cutting costs and being conservative with your spending.
Here are some tips you can use to keep spending under control.
Do you need that Software?
It is almost guaranteed that you need word and data processing software for yourself and probably all of your employees. These days, there are almost always free options. Google docs and sheets have a freemium option, where you can use them for free until you need more space. You could always use a built in text-editor like WordPad or Mac’s Text Edit if you need to do a lot of writing. However, there is a reason that Microsoft Office is so popular; Word’s features and Excel’s sheer processing power is so excellent that Office has become the world’s gold standard text and data processing package.
If you think that they could bring value to your business, then you should consider buying them from a reseller, which typically offer discounts on software. For example, in the case of Microsoft, Bytes offers the highest discounts that a UK re-seller can offer.
Do you need those lights?
Energy is a big cost to businesses. So, try to work hard towards reducing energy expenditure by adopting eco-friendly lights, reducing consumption of single-use supplies like paper products, and opting for a water dispenser with glasses instead of disposable bottles or plastic cups.
Do you need that meeting?
You want your employees to be utilizing good flow, which is the most efficient state of working. It is well-known that one of the least efficient business practices are meetings. If time is money, then meetings waste both as they can often pull employees away from work.
Do you need that employee?
It is a sad truth, but if there’s an employee who is taking their time to complete work and are draining valuable resources, then consider asking them to leave and hiring a freelancer. You need to ultimately do what’s going to be best for you and your business, and making these kinds of decisions is never going to be easy. This is why many companies are deciding to outsource some services.
These tips are a great starting place to get you thinking about saving money, and can definitely help to put less pressure on a cash flow that is drying up. However, a proper audit of your processes may be necessary. If your business is small, then you can do this by reading some online guides and doing it yourself, but if it is larger, then you may need to hire a consultant.