As any experienced small business owner can confirm, keeping the lights on can be challenge during the first year of operation. While new enterprises engage in promotional efforts, wait for word-of-mouth to spread and try to carve out unique identities for themselves, they’re likely operating at a loss. That being the case, it behooves budget-conscious entrepreneurs to keep spending under control throughout this vitally important period. For many small business owners, getting a handle on finances may seem easier said than done. Luckily, a little bit of willpower, financial knowhow and follow-through can go a long way in helping small businesses curb spending.
Utilizing Spending Management Software
Reliable business spend management software can be an invaluable tool for enterprises that want to get a handle on spending. The right software will meticulously track your business’s spending habits and provide you with an accurate accounting of how much is being spent in a variety of areas. This can be particularly helpful for small businesses that lack the budget for dedicated accountants. Spending management software can also prove useful at helping your business draw up a workable budget. Knowing the exact ways in which your resources are being allocated is crucial to creating a budget that can benefit your enterprise long-term.
Rethinking Your Promotional Endeavors
Word of mouth is crucial to the success of most small businesses. No matter how skilled your staff is or how reasonable your prices are, it doesn’t matter if people aren’t aware of your enterprise. In order to build awareness, many fledgling enterprises embark on ambitious promotional endeavors. However, as any seasoned entrepreneur will tell you, traditional forms of promotion don’t come cheap. Purchasing ad space on local television outlets, radio stations and print publications is practically guaranteed to cost your business a pretty penny.
Of course, this isn’t to say that you should resign yourself to paying an arm and a leg in advertising costs. In recent years, many fledgling enterprises have seen success with nontraditional forms of promotion. Social media outlets, in particular, have become popular hotspots for small businesses looking to get the word out. Going this route can prove particularly effective for businesses that cater to younger demographics, so if your enterprise has yet to embrace social media, there’s no time like the present to get on board. In addition to creating profiles for your business on popular social media mainstays, take care to provide daily updates and create posts that encourage active engagement from followers.
Lowering Office Costs
Renting pricey office space is among the foremost causes of financial hardship for small businesses. However, depending on the nature of your business, you may be able to bring down rental costs by allowing employees to telecommute. As a growing number of enterprises are discovering, most employees don’t need to be physically present for eight hours a day and are perfectly capable of tending to their job duties from home. So if many of your team members have jobs that can be done from home, consider embracing telecommuting and renting smaller, more budget-friendly office space.
Purchasing Refurbished Equipment
Wanting to stock your office with new, cutting-edge tech is perfectly understandable. As the adage goes, “You need to spend money to make money.” However, there’s no sense in committing to a particular manufacturer or getting hung up on purchasing brand new equipment if off-brand or refurbished tools can suit your needs just as effectively. Instead of overspending on computer equipment right out of the gate, make a point of exploring your options. An openness to investing in refurbished products stands to cut your equipment costs in half, thereby freeing up resources for other areas of your business.
Keeping a small business afloat throughout a rocky first year can be an arduous undertaking. During this period, many fledgling enterprises experience financial difficulties brought on by inefficient spending practices and poorly though-out promotional efforts. You’d be hard-pressed to find a small business that hasn’t dealt with money problems, and an enterprise’s ability to overcome these problems can say a lot about its long-term solvency. Small business owners looking for effective ways to get a handle on spending are urged to heed the previously discussed pointers.