It’s easy to see why so many small businesses spend their first year of operations in belt-tightening mode. Regardless of what your enterprise has to offer, building a brand and cultivating a professional reputation takes time. As such, it’s likely going to be a while before you can depend on income from a steady stream of clients. While this can definitely be a rocky period, there are a number of simple measures you can employ to minimize spending and stay afloat. First-time business owners on the hunt for effective money-saving measures should heed the following pointers.
Use Cost Management Solutions
Not every small business owner is necessarily a skilled money manager. If this describes you, make a point of utilizing cutting-edge cost management solutions for your business. A convenient assortment of software and apps designed to help businesses control costs and avoid overspending are available to every entrepreneur who seeks them. Any small business owner who values meticulous project planning should become acquainted with these solutions posthaste.
It’s only natural that you’d want to staff your business with the best of the best. No matter how minor the role, wanting to fill it with the most qualified candidate possible is perfectly understandable. However, if you fall into the trap of over-hiring, you may find your precious financial resources drying up in no time. While certain roles absolutely warrant full-time hires, some jobs don’t require a 40-hour-per-week commitment. As such, if you only need certain individuals on a part-time or as-needed basis, employing freelancers can be a great way to save money.
Also known as “contractors,” freelance employees generally work with businesses in a limited capacity and are either paid by the hour or on a per-project basis. As an added bonus, if you’re interested in eventually turning a certain position into a full-time role, bringing someone on as a freelancer can serve as an extended job interview. After all, just because someone is able to present themselves well doesn’t mean they have what it takes to excel at the actual job. On a similar note, if any freelancers prove themselves invaluable to your enterprise, you should consider extending full-time offers to them once you have the resources to do so.
Rent a Modest Workspace
It’s easy to see why so many first-time business owners seek to rent out the largest office spaces possible. The way these budding entrepreneurs see it, size is a sign of success – and the larger the workspace, the more respect it commands. However, this “go big or go home” mentality can bleed you dry financially. If most of your limited resources are being put towards rent, this doesn’t bode well for your business’s long-term prospects. Additionally, large workspaces are synonymous with large operating costs, so unless you’re going into business with a sizable amount of capital, you’d do well to rent a modest workspace – especially if you’re based in an expensive area.
Appreciate the Benefits of Remote Work
As a growing number of employers are coming to discover, remote work has a number of benefits. For one thing, allowing team members to work from the safety of home is a great way to slow the spread of COVID-19 and keep employees out of harm’s way. In addition, embracing remote work can help foster employee happiness and make your top talent less likely to abandon you should higher-paying opportunities come along.
Being open to remote work can also prove beneficial to your finances. Fewer employees around the office means lower operating costs. This also frees you up to rent a relatively small workspace, which as previously stated, is likely to command much lower rent than larger offices.
The first year of operations can be a tough time for any small business. No matter how dedicated your staff is or what your company has to offer, cultivating a steady stream of clients and carving out a name for yourself takes time. Since most companies have very limited resources to work with throughout their first year, it behooves business owners to effectively manage money and keep the reins on excessive spending. Fledgling business owners looking to save money across various areas can benefit from the measures outlined above.