According to an article by Business Insider, 82% of small businesses fail because of cash flow problems. Keeping track of business expenses is a crucial task, especially since, if done properly, it can help save money in the long-term.
If you don’t know how to make heads or tails of the process, here are five tips that can help your business reduce costs.
1. Have a Business Budget
You’ll need to know how much money is coming in as profits, and you’ll have to allocate funds for expenses such as payroll, maintenance, and investments. Understanding your budget helps you make smart decisions for the business later on. For example, if one of your machines break – do you buy a new one? Or have it repaired with new parts, or with refurbished parts?
To help figure out which choice to make, you could review your budget to see how much money is available to
support each choice. Learning how to properly manage business finances and working from a budget makes a strong foundation for your business decisions, and will ultimately result in reduced costs.
2. Outsource Small Jobs
When you own a business, there will be many small aspects of the business that you may not necessarily have to do yourself. This is where outsourcing becomes useful and can help save you money. As we wrote previously, there are many freelancers available online on websites like Fiverr and Toptal. The benefits of outsourcing short jobs is you get personalized work for a specific task without having to hire an employee, thus saving costs associated with long term employment.
3. Hire Carefully
Hiring the right person can be a challenge, and if you get it wrong it can become a very expensive mistake. The U.S. Department of Labor estimates the financial cost of a bad hire at 30% of their annual salary.
If you have a small business, like a mini-store, costs can add up in other ways. LHH notes that bad hires actually cost more in the long run due to collateral damage like eroding employee morale, poor employee engagement, and undermining an organization’s productivity. Luckily, there are some things you can do to hire better, like structuring your hiring process or calibrating interviews using candidate assessments. These small steps prepared in advance can help avoid costly hiring mistakes in any organization.
4. Capitalize on Technology
Technology can help save your company money, if applied correctly. For
example, a vending machine business uses machinery to dispense chips, candies, and soda in exchange for bills
and coins. New innovations in technology employ modern touch screens as well as multiple payment methods, like QR codes and credit cards. While the upfront expense of technology is high, these machines have
lower maintenance costs compared with old manual mechanical models that tend to need repairs every now and then.
5. Use Social Media Marketing
Marketing on social media is a powerful and effective way to reach millions of potential customers. For example, Facebook is an ideal platform for small businesses to market on because it has 2.93 billion monthly active users and you can upload photos and videos of your products and even communicate directly with potential customers. The best part of marketing on social media is it’s free and all you need to do is open an account!
The goal of every business is to have
more profits, and one of the easiest ways to do this is to reduce costs. Fortunately, there are many ways to cut down on expenses without sacrificing business quality and integrity. Try these five tips out and see your business thrive with more profit.
Article contributed by Jenny Rowe
Exclusively for Vending World