One in four small businesses fail within their first three years in the UK. And out of those that survived, half will go under within five years. It shows us why is so important saving costs whilst owning a business.
Granted, several factors are responsible for business failures. However, going by the data available, eighty-two per cent of businesses that fail cite poor cashflow and ballooning business expense as major reasons for failure.
As a small business owner or someone who is planning to start their own thing, controlling costs is going to be a significant focus of your management strategy if you want to survive in an increasingly hostile business environment.
Thankfully, there are five simple steps you can take to cut costs whilst improving your business’ bottom line:
- Optimize marketing efforts
In an ideal world, all your marketing campaigns should make a good return on investment. But that’s not always the case. You will find most times that some of your marketing efforts bomb.
Instead of burning through your marketing budget on non-performing campaigns, scale back and focus only on those that bring in the desired results.
For instance, with more potential customers online, you don’t have to spend a fortune to advertise your business. Start by building a website, create a brand-consistent profile on social media platforms then link back to your site.
Once you have your online presence set up, leverage timely and useful content to position your brand as industry-expert and maintain your customers’ top-of-mind.
- Hire freelancers for non-core tasks
For most businesses, payroll expenses take about 70% of revenue which include staff salaries, perks and benefits. As a startup, you may not have the deep pockets to handle these expenses.
However, by hiring freelancers, you not only save on these payroll costs but also improve productivity since freelancers usually work on a per-project or task basis.
Be sure though not to over-rely on independent contractors as they may not be as loyal as full-time employees. To get started, check out freelance marketplaces like Upwork, Fiverr, and Guru to outsource your tasks.
- Use co-working spaces instead of renting an office
Working from shared office is a great way to save on daily office expenses and rent. First you are relieved from the financial burden of leasing or buying your own office space. Secondly, you also save on furniture and equipment for your office.
When working from a co-working space, you only need to pay for your space or desk while the coworking office provider takes care of the amenities on the property.
- Cut back on utility bills
Monthly energy bills when left unattained can add up pretty quickly. But there are several steps you can take to ensure a lower utility bill at the end of the month.
For example, you can install a programmable thermostat to help regulate workplace temperature, which in turn, can save you anywhere between 10 to 15 per cent in energy costs.
While at it, consider implementing an energy-saving strategy that includes upgrading all the light in your office to energy-saving ones, swapping your devices for energy-efficient ones, and perhaps, moving to office space to plenty natural light.
- Barter services in exchange for what you need
Bartering is a great way to offer your services to another person in exchange for their help. Perhaps you are a copywriter and you need a website? Well, with bartering you can check online to find a web designer willing to exchange their service for a compelling copy. However, be sure to do your due diligence before entering into a bartering relationship with anyone.
Evaluating your spending and your overall costs can make a big difference in your business costs by cutting unnecessary expenses and allocating the money where it’s truly needed.
Ultimately, coworking spaces save you time and money by taking care of your entire office space for you, reducing business costs. Purple Patch on the other hand, offers monthly packages that allow your business to lock in a great rate for an extended period of time. Interested to see more of Purple Patch? Get in touch here and book a visit!