Starting a business can be an expensive thing to do, especially if it takes a little while before you start to make enough money to earn a living from it.
There are always fees that need to be covered, from taxes to employee wages, advertising or marketing costs, and usually rental costs – either in the form of office rent or in some cases, store rental.
However, there are ways to reduce these costs so you can launch your business on a financially healthy note.
First way to save: Energy Efficiency in your Office and/or Store
Utilities often account for a significant portion of overhead costs. If you can find a way to increase energy efficiency in the office, you’ll enjoy some significant cost savings.
Heating and cooling is one thing to look at. A programmable and/or smart thermostat system may allow you to cut climate control costs without compromising on comfort.
By turning your heating and air conditioning unit off overnight, you’ll certainly notice the difference in your utility bill, especially nowadays where utilities are at a record high.
Second way to save: the Art of Negotiation
When it comes to business expenses, many small business owners don’t negotiate anywhere near enough. You can often negotiate with vendors to secure a better deal. To do this successfully, you should get multiple quotes from other vendors and be prepared to walk away.
You could negotiate with vendors such as your cleaning agency, people who service your machinery or even where you order your printer paper from!
Additionally, when you’ve been in a building for a while, you might be able to negotiate a better deal with your landlord.
If you are a good tenant that pays on time every month and looks after the building, you might be surprised at what you can get. Most landlords are looking for a reliable tenant.
Third way to save: Be Smart with your Employees
Encourage Remote Working
As a boss, remote working can seem a little scary, as you can’t monitor the productivity of your employees. However, it has been proven that it can increase productivity and employee happiness. Moreover, the biggest benefit is that you don’t have to pay the physical costs of keeping employees in the office.
Remote working became more common in many business across the US during the Covid-19 pandemic, and if you found that it was working well for your company, there’s no reason why you should make it compulsory to work back in the office everyday of the week.
Hiring internal employees is expensive. The true cost of an employee goes way beyond their actual salary. That’s why you should outsource as much as possible.
Some things will need to be kept in-house. However, you can outsource digital marketing, design, payroll, bookkeeping, and more.
This has two benefits: firstly, it means that you don’t have to pay the additional costs of an employee, and secondly, you get expert-level help and don’t need to pay for training.
The Pareto Principle
The Pareto Principle, also known as the 80/20 rule, states that for many events, roughly 80% of the effects come from 20% of the causes.
If you apply the Pareto Principle to your business, you will notice very powerful changes. Make sure you always focus on what is working best, and what is taking you the least amount of time. That way, you can always optimize your time and get more income.