Always keep the maxim that a penny saved is a penny earned in mind when running your business.
By Henry Brown
Being a successful entrepreneur is about more than just making a fantastic product: it’s also about managing money. Many entrepreneurs who have great products often end up getting into trouble because they expand their businesses too fast or don’t keep enough cash in reserve to meet their basic salary and overhead payments.
There’s a problem though: many entrepreneurs worry that if they don’t splash out, they’ll be seen as cheapskates and that will detrimentally affect their business. The good news is that there are all sorts of ways you can save money stealthily. Here’s how.
Always audit your subscriptions
The average business has more than a dozen subscriptions to different services. It can be anything, from monthly payments for website widgets to telephone services. Most of the time, these subscriptions add more value to your business than they cost, but not always. It’s a good idea to go back and look at your business bank statement to see how much your subscriptions are costing you. If a subscription is costing you a lot of money, but you’re not receiving value in return, it might be time to cancel.
Outsource your IT support
IT is one of the biggest expenses for most businesses after wages and rent. And so there’s often an enormous benefit to bringing costs down. In the past, it was hard to get IT services on the cheap: you had to buy everything, from the servers to the people who manned them. But today, much of it can be outsourced to third parties without any change in the quality of services offered by your company. With colocated & onsite server support, you could potentially save tens of thousands of dollars every year. And you could avoid many of the headaches associated with maintaining your own in-house services.
Always negotiate
Entrepreneurs can sometimes get lazy when it comes to saving money. Somebody will offer a price for a particular service, and they will just accept it, no questions asked. Usually, though, you’re able to negotiate down prices for practically everything: wages, supplier costs, and even utility bills. Lower costs put your business at a competitive advantage and may even result in higher staff bonuses in the long run.
Stop paying for office space
Some companies need office space. But do all? Probably not. Recently, IBM got fed up with spending so much money on renting offices around the world. The company decided to shut down a large chunk of its global offices, saving the company more than $150 million in rent per year. Of course, IBM still has some offices, but their decision represents a sea change in the business community. Offices used to be seen as completely essential, but in today’s business world where companies often travel to clients and not the other way around, physical offices are becoming less and less important. What’s more, digital apps like Slack are making it easier than ever for people to communicate with one another throughout the day without being physically present. Entrepreneurs usually find that the slight loss in productivity when employees work from home is easily offset by the savings from not having to pay so much rent.
____
Henry Brown is an online marketing executive. When he isn’t talking shop he’s roaming the streets of London, uncovering the extra-ordinary in the ordinary.
