Building a small business from the ground and up is a fulfilling endeavor – and a profitable one, too. Getting there, however, is a tough act to pull off.
Did you know?
8 out of 10 startups fail within the first 18 months – an 80% failure rate! And in an analysis of 101 startup failures, #biztech company CBInsights found that “running out of cash” is the 2nd biggest reason why new businesses crash.
Here at OnSMB.com, you can find a treasure trove of marketing posts that ultimately teach you how to grow revenue.
But if a new SMB is to survive the competitive landscape, the business should not only make more money. It should also spend less than what it’s making.
SMBs also need to use the available tools and solutions as leverages. For example, using onboarding solutions when introducing time-saving software or cost-cutting solutions to the company can smooth transitions and bring your faster on-boarding to the future.
In this post, we will look at how startups and small businesses can slash costs while staying competitive.
Approach Recruitment With A Sales And Marketing Mindset
Recruitment is identical to sales and marketing. With the former, you are selling your company as the ideal workplace for the job candidate – the customer.
And there are two sales and marketing mantras that are just as applicable to recruitment: “go social” and “encourage word of mouth.”
The use of social networks to advertise job openings and recruit top talent is commonplace for businesses – and for good reasons.
Social recruitment is a proven money-saver, slashing recruitment costs by up to 50%. But even better, 59% of recruiters discovered that candidates found from social networks are of the “highest quality!”
Word-of-mouth marketing is another tactic that suits recruitment like a glove. And there are no better ambassadors and marketers for your business’ job openings than your employees!
LinkedIn’s Global Recruiting Trends 2016 survey found that 32% of over 3,000 corporate HR decision-makers consider employee referral programs as a leading source of quality hires (like social media).
Not only do employee-referred candidates take less time to get on board. They also stay in the job longer, saving business owners from squandering thousands of dollars in lost time and productivity due to poor staff retention.
Stay In The Cloud
Just about any business-related process can be handled through the cloud!
Whether you need to find and resolve IT issues, collaborate and manage projects, deal with daily accounting tasks, or track the productivity of your staff, you can rest easy knowing there’s a cloud-based tool for that!
The best part about cloud software and services is their monthly subscription model.
Without the cloud, a productivity suite that sits in a PC like Microsoft Office Home & Business can cost business owners more than $200 – and that’s for a single computer.
Thanks to cloud-based services like Office 365 and Google Apps for Work, businesses the same rich features of desktop-installed software – but for less than $10 per month!
For 88% of the 1300 US and UK companies surveyed by Rackspace and Manchester Business school, switching to the cloud led to a sizeable reduction of their operational costs. Moreover, 56% of the survey participants even profited due to the move while 62% plan to reinvest their savings to grow their business.
If you want to boost employee productivity and provide the tools they need without drilling a hole in your budget, you can’t go wrong with cloud-based tools.
Need To Buy Tech Equipment? Consider Leasing Instead
Buying tech equipment is a straightforward process: go to a brick-and-mortar or online shop, find the workstation or printer you need, pay for it, and that’s it!
But while buying is a no-frills process, the initial outlay for getting the tech equipment a team needs may prove too much for a startup.
For example:
If you own a video editing startup and need a reliable and faster workstation, a model with a lightning-fast Core i7 processor and hefty 64GB RAM can cost anywhere from $1500 to $3000.
Obsolescence is another problem. A desktop computer, for example, has a short average lifespan of 4.6 years.
Sure, a piece of tech may still be in working condition despite being outdated.
But if your business relies on having the best equipment available to stay competitive, you may find yourself stuck with an obsolete piece of hardware in “working condition” while struggling to raise enough purchasing power to get a newer and better model.
So here’s an alternative: lease tech and office equipment.
Sure, leasing office essentials like computers, printers, and networking tools often end up costing more than buying in the long run.
However, leasing will cost nothing upfront and the total amount of the long-term rental agreement (including interest rates) are divided into predictable monthly expenses.
For new businesses struggling with cash flow, leasing can be an attractive option to get the equipment they need without bleeding their bank accounts dry.
Go The DIY Route When It Comes To Marketing
Want to boost sales, gain better customer insight, and slash expenses at the same time?
Go the DIY marketing route!
Running marketing campaigns in-house costs way less than hiring a marketing firm thanks to the growing number of affordable and effective online marketing tools.
Want to give your email list a boost? A top landing page builder like Leadpages puts hundreds of conversion-optimized page templates within arm’s reach.
Need to handle customer service questions via social media and post updates in Facebook, Twitter, and company? Social media tools like Buffer and Hootsuite let users monitor and manage accounts across different networks in a single platform.
But while reducing expenses is nice, DIY marketing affords another advantage to the hands-on business owner – better customer insight. Most marketing companies have diverse industry experience but often lack the extensive knowledge which comes from interacting with a customer base on a daily basis.
An in-house marketing team, on the other hand, knows the goals of the business and the profile of their targets like the back of their hand. And this “insider” knowledge is essential for creating a documented marketing strategy, a secret weapon of 66% of the most effective B2B marketers.
Conclusion
We can only applaud you for taking the small business path!
It’s a high risk move and the road ahead is bumpy. But rest assured that the rewards are even greater! And in this guide, we’ve looked at ideas that can help new business owners keep their operational costs low and still stay competitive.
Of course, the list is by no means exhaustive.
Do you have other money-saving tips for new business owners? We’d love to hear from you so comment below!
