Doing business involves a lot of experimenting and getting theoretical tips from others. But when the going gets tough, you would want to get some real, proven-tested advice. 2024 has been an economic nightmare. As many businesses struggle to keep afloat, some have already succumbed to the pressure and ultimately had to close. As we enter a new year, we are hopeful that things will eventually turn around for the better.
I’m pretty sure you’ve also had your fair share of struggles. So, if your business is still standing, kudos to you! If not, I hope to help turn things around by showing you eight cost-cutting tips for small businesses. Throughout my research, I created this list of ideas to help your business succeed amid a struggling economy.
1. Switch to Low-Cost Advertising
Despite the ongoing global health crisis, businesses still need to progress forward to keep their operations running. That means they also need to continue with their marketing ploys. However, these trying times also suggest trying out new ways of advertising.
Since more people are staying at home and not going outside, traditional advertising isn’t as viable as it once was. That’s why it’s time for you to adapt to these circumstances and focus more on low-cost advertising. Thanks to internet marketing, you can now cut your traditional advertising costs in favor of something cheaper. However, you will still reach your target customers like conventional advertising.
Apart from internet marketing, here are other low-cost advice that many established businesses are doing:
- Establish good public relations.
- Become a reliable source in publications and media outlets.
- Switch to inbound marketing.
- Cut down on paid internet advertising (e.g., Google Adwords).
- Utilize SEO tools and techniques to boost traffic to your website.
- Create media (YouTube videos, Facebook videos, infographics, etc.)
2. Acquire Sponsorships for Your Events
If your business relies heavily on regular events, then it’s about time you consider getting sponsors. While being able to fund our event is fulfilling, it’s not very practical. It can even hurt your profit over time as the expenses will eat through your revenue. By acquiring sponsorships for your event, you’re also helping your business stay afloat.
With sponsors, you have the help you need to carry out the expenses of the event. In exchange, you offer your sponsors some form of advertising within the event. Getting sponsorship from sponsors related to your business is also beneficial. Not only will you be promoting them, but you’re inadvertently promoting your business as well.
3. Outsource Your Operations
While valuable, your employees take up the biggest chunk of your budget. So, if you’re looking to cut costs and salvage your business during these trying times, you’ll need to make some changes. Specifically, keep your full-time staff to a minimum and outsource other work to independent contractors and freelancers. By doing so, you’ll cut your overall costs in half since outsource workers tend to cost less than in-house employees.
When you outsource your work, you’re also establishing good connections with key contractors. That means they can also recommend you to other independent contractors that also charge less for the service they provide. With outsourcing, your business will keep growing while your costs become more manageable.
4. Good Negotiation is Key
Another key business strategy that successful businesses continue to do even when they’ve reached success is making negotiations. If you want to get a better deal, you must not stop negotiating the current ones. Your current deal with your vendors doesn’t have to be the same forever.
As time changes, the current trends may not always look the same. Like you, vendors are also dealing with the effects of a struggling economy. They will do anything to retain as many customers as possible. That means now is the best time to negotiate lower prices to compensate for these trying times. Not only will you be helping out your business, but you’re also helping other vendors stay afloat as well.
Always try to negotiate for better deals. It’s a business strategy that has been used for ages, and it continues to show relevance even today. Never settle for what you currently have. If you can lower the costs even more, the better your business will be moving forward.
5. Barter If Necessary
When doing business, it doesn’t always need to have money involved. Sometimes, you need to think beyond your pockets and look for alternate ways to acquire the goods or services you need. When your finances take a dip, as it usually does for small businesses, never compromise your operations. Instead, you can take advantage of another age-old practice – bartering.
You can barter your services in exchange for the services of another business. For example, a telecommunications company can offer its communications services in exchange for web development services from a digital marketing company. Again, you’ll need to unleash your negotiating prowess here.
Remember, good negotiation is key. Yes, you will get an occasional ‘no’ as an answer to your proposal. But don’t let that hinder your intentions. Look for other potential trade partners and be persistent with your intentions. You’ll be surprised how quickly people will say ‘yes’ when they see the benefit in what you are offering them.
6. Use FREE Software Platforms
In today’s generation, businesses are blessed with the convenience of automated online systems that smoothly run their business. From digital banking to online invoicing, there are multiple ways you can make your business operations easier and hassle-free. The best part? You don’t even have to spend money to do it!
Some platforms require a subscription. I’m not saying you shouldn’t invest in these tools. But as a business trying to cut costs, you want to avoid spending as much money as you can. Fortunately, you can get access to the same services at zero costs with freemium software platforms.
Want a platform that helps you organize your projects and keep your team in sync? Try out Slack and Trello. Do you need to keep constant communication with your employees who are working from home? Create a Skype account or try out Zoom. Do you want to make your invoicing faster and easier? Create a FREE account from ReliaBills. Need an application for social media management? Try out Buffer. Want to create a professional-looking website? You can do that with Wix.
There are tons of free software platforms that small businesses can use. These are the same tools that even big companies utilize. So, make sure you do the same. Research and determine which free platforms you want to incorporate into your business operations.
7. Reduce Employee Expenses
I’m not saying you should start removing employees. While they take up a huge chunk of your budget, they are also the main reason you earn. Your employees are valuable assets that will help your business flourish. However, that doesn’t mean you need to pamper them with unnecessary perks.
For instance, you don’t have to provide your employees with free lunch or free snacks. They can bring their lunch to work instead. Understand how the economy rises and falls and how it affects your revenue. If you think you cannot sustain an employee perk, you either adjust it to a more manageable amount or remove it completely. There are tons of ways to keep employee morale high without spending too much money.
8. Hire the Right People
Speaking of employees, it’s about time you learn how to hire the right ones. I’ve found that smart, inexperienced people are the best. Experience isn’t everything, after all. I know that it sounds so cliché at this point, but it’s something you need to understand fully. One thing you should also know is that experience is overrated and quite expensive.
People with experience tend to demand more compensation for their services. That’s why you should opt for inexperienced people, but are smart and are willing to learn. So, the next time you put up a job ad online, make sure you remove the line that says, “Must have X years of experience.” Instead, you should target untapped potential, specifically newly graduates. These people are young and are hungry to land their first job.
As a small business, I encourage you to try this perspective. You can hire people with high potential at an entry-level salary. Since these people are young and fresh, they are also up-to-date on the latest trends and technology. These people will prove to be assets to your business as you nurture them and guide them throughout the way.
Conclusion
Cutting costs doesn’t mean making significant compromises. Sometimes, all it takes is a change in business perspective. Always keep in mind that the trends are ever-changing. Time is still turning according to the recent state of the world. To survive, you need to adapt your strategy accordingly. By using these eight proven tips, your small business will flourish even during a shaky economy.
