When business is booming, start-ups often find themselves taking the cash with one hand and spending with the other. No problem, and that's good business. But when sales hit a lull, how do you cut your outgoings and balance the cash flow as quickly as possible? Here are our top tips to cutting back during dry spells.
It may mean an initial outlay, but switching to environmentally friendly options could save you tons in the long run and it won't do your brand image any damage either. One huge advantage of using green technology is being able to do more with less - using energy saving light bulbs will cut down your electricity bills, deploying carbon friendly cars could save you loads as green vehicles are exempt from road tax, and by ensuring your office is properly insulated you can slash your heating bill.
The best way to make sure you have enough staff to meet the demand when at peak times and not too many twiddling their thumbs when it is quiet is to hire freelance staff. It means when sales are down, you're not forced to pay a salary and when business is great you can get the extra staff in the areas you need.
You could save hundreds by working remotely and leaving the office behind. You could work from home, like our Home Business Heroes or if staying indoors will make watching daytime TV too tempting, then you can always work in a café that offers free Wi-Fi, or find a drop-in hub that are used by small businesses, like Club Workspace. If you employ others, you can ask them to work from home and offer to pay their internet and phone bills as these are costs you would have incurred anyway, saving you the cost of providing an office space.
Making a sale is great, but the profit you make can take a hit if the customer uses their credit card due to the fees that each transaction incurs. Instead of just letting out a huge sigh each time you see the dreaded plastic, offer your customers an incentive to pay you directly. For instance, you could offer a cash back bonus of 1.50% if they pay directly saving yourself the 3% or so the credit card middlemen would charge you. One American company, Clickspeed, did exactly this and despite paying out bonuses, managed to save $49,000 in 12 months.
Moving your services to the cloud can save your business heaps. Using free services such as Google docs can cut out the cost of installing software on every computer in the office. Pretty much anything you can do with software can be done online. Using the cloud can also mean you don't have to shell out for expensive hardware. All your files are backed up online so there's no need for dusty servers to be kept in our office.
We have our own cloud-based service, Smarta Business Builder, the ultimate business tool for managing your start-up. It can provide your business with email, legal documents and accountancy software all online and in the cloud.
This one isn't just to save the trees either. Ink cartridges are expensive kit and the more you print the more you'll have to buy. There are very few things that absolutely have to be printed and most business is done over emails and digital submissions, so it might be time to switch off the printers and maybe only use them on Fridays, for the essential stuff.
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