Approximately 29% of businesses fail because of cash flow issues.
If anything, finances play a significant role in determining how long you will be able to keep your doors open. For this reason, a lot of thought needs to go towards financial management.
Which are some of the ways you can ensure your business remains in good financial health?
Here are some expert tips for small business owners.
1. Negotiate
First lesson in business: nothing is cast in stone.
You do not have to pay vendors what you have been paying all along. Once you become a loyal client, consider asking for discounts.
Just like you, vendors are in business and want to remain in business. They are therefore open to making concessions to keep their clients as opposed to losing them.
You can look into other avenues of saving money.
For example, can your suppliers deliver free of charge on goods worth a certain amount? If this is a possibility, then it could be reasonable to align your purchases to meet those stipulations.
The savings you make on transport costs can go towards other operational activities.
2. Take a Second Look at Your Credit Cards
Credit cards are a popular choice for both individual and business use.
However, take the time to analyze what you get from them vs the cost they come at.
One way to do this is to assess the costs of having credit cards periodically.
Another way is by shopping for the best cash back cards in the market. These allow you to get some of your spending back at the end of every month.
3. Hire Intelligent People with Little Experience
When starting out, you do not want to spend all your money and the bulk of your profits on salaries.
One thing you can consider doing is hiring smart people with little experience.
Their asking salaries will be significantly lower. You can then train and mould them into performing their roles skillfully.
In addition, find employees with the right attitude, and you have a great team at a fraction of the cost.
4. Allow Remote Working (Teleworking)
Granted, this might not be possible for all types of businesses.
However, for those that can allow, remote working or teleworking can save you some money especially when it comes to office space and utilities.
The opportunity for remote working can also be considered as a perk and paired up with a lower salary.
5. Buy Used Office Equipment
If your office equipment bill is getting too heavy, it’s time to consider different options.
One such option is making different shopping decisions. Instead of purchasing new equipment at a premium, how about looking at second-hand shops?
Here, you can find used top brands that are in great shape at a fraction of the cost.
Once you acquire the equipment, ensure to follow a strict maintenance regimen to ensure efficient energy use and minimize on downtimes.
Aside from second-hand stores, browse social media pages and newspapers for leads.
6. Hunt Down Free Software
Software is expensive to buy, more so when you factor in all the updates that will be required from time to time.
It can prove to be costly when you pay for one that ends up being a bad fit for your business.
Try out free versions of the software you require; you might find them quite useful. Besides, if one doesn’t work out, you can easily switch to another free version.
This will save you some money until your business grows enough to afford to purchase premium services.
At this point, you will have identified the best products for your business.
7. Evaluate Constantly
Finally, evaluate the results of these money-saving measures continually.
The aim is to measure the gains and how these stand against your day to day operations.
As always, change your strategies when necessary and do not shy away from being as creative as possible.
Remember, money sits at the heart of your business. Every little bit goes a long way in your success.