John Gordon, World Executives Digest | The main reason why 9 out of 10 small businesses fail are financial problems. Aspiring entrepreneurs with no previous experience in the industry are likely to either overestimate their income or underestimate their expenses, which will, in time, lead to a huge problem with their budget. Seeing as how most guides focus on finding ways to increase profit, today, we will talk about saving money. Moreover, we will completely skip the most obvious tips like leasing a smaller office or bartering with your suppliers. Here are five unorthodox ways for your business to save money.
Offer non-monetary incentives
The first thing you need to keep in mind is that frugal and stingy are not the same thing. In order to maximize your profits, you need to motivate your employees to invest some extra effort, however, offering monetary incentives can be quite pricey on its own. Luckily, there are many ways to reward your employees without spending money. For instance, you could give them the front parking spot, an extra vacation day or even thank them in public. You would be surprised just how efficient these methods can be.
Starting your own non-core department (customer service, HR, IT) can be an incredibly expensive endeavor. Not only do you have to dedicate a huge amount of your time and effort hiring but you also need to purchase the industry-specific tools and hire mentors to train your staff. Because of this, it is usually much more frugal to outsource these tasks. Aside from being less expensive, it will also unburden you and allow you to focus on other administrative tasks that require your immediate attention.
Buy second-hand equipment
While some argue that having a high-end equipment benefits your business’ performance and prestige, sometimes you simply can’t afford it. Face it, as a startup or SMB, you probably won’t be able to afford top-tier gear anyway, which is why you need to focus on sheer pragmatism. If the appliances you purchase are in working condition and their price is low enough, the opportunity might just be too good for you to pass up.
Commissioned sales team
One of the greatest fears that most employers have is that their team members are slacking or at least not giving it their 100 percent. The easiest way to handle this problem is by keeping your sales team on a commission based salary. This way, their income is directly related to their performance, which means that your expenses (their salary) will be the mirror image of your income (their performance). Furthermore, this will keep them motivated in years to come.
Think about your utility bill
Those who are aiming to save some serious money in the long run, need to find a way to minimize the cost of their office utilities. By replacing your bathroom fixtures with low-flow ones you are bound to reduce your environmental impact and save some money at the same time. Additionally, you can replace most of your appliances with low-power ones and achieve a similar effect. Those willing to invest even more might even consider installing several solar panels on top of their headquarters and purchasing sonnenBatterie to further enhance this self-sustainable system.
Where there’s will, there is always a way and in order to save money, you will have to become extremely resourceful. This means improving your negotiation skills, learning how to think outside of the box and coming up with frugal company policies. Still, keep in mind that sometimes trying to be frugal means hurting your productivity, which is usually not worth it. This is why you need to make some careful considerations before making any radical decision.