Any small business can make more money by increasing sales or by reducing expenses. Increasing sales will take up a lot of your time as it requires planning but the daily costs can be cut easily, which will result in a larger bottom line.
Here are some ways to do that:
Shift to a space that’s cheaper:
Not every business needs to rely on locations with high foot traffic to be successful. By moving to a cheaper place, you can reduce the cost of rent. If your customer base is not local and you do not have a large number of walk-in customers, you can consider this option.
Reduce the number of telephone connections:
If you still use a landline for your business, you should think again. Using mobile phones will be a lot cheaper than the landline phone and will also offer flexibility (no need to be in the shop to receive any customer call).
Use that unused space:
If you have some unused space in your office or shop and if you are allowed, give it on rent to a bank for installing ATMs, store extra products, use it for marketing or make it into a workspace where there can be meetings or some informal discussions.
Review even the smallest expense:
There should always be a track record of your expenses. Accounting software can help you with this and assist you in taking measures to reduce or get rid of some unnecessary costs. If you are not doing this, start now!
Avoid traditional advertising:
Traditional advertising methods like print or TV Ads and putting up hoardings etc. can be expensive. Use social media to advertise your product, so that it reaches the target audience and will guarantee good returns.
Never buy in bulk:
Buying in bulk seems to be a better option if you have a small business, but you will have to consider the usage of the products and for how long you will require a particular product. As a small business owner, you can reduce expenses by buying what you need today. Your main focus should be on improving cash flow.
Keep track of stock:
If you have a business where the stock is involved, less stock means having less stuck up money and more of the money in the bank. Monitor your inventory closely to make sure you are not overspending. You can also consider using inventory management software.
Try selling your products online:
You must be aware that E-commerce is a big market. Nowadays it has become easy to set up accounts on E-commerce sites like Flipkart and Amazon to sell your products online. By doing this, you can save a lot on marketing and inventory maintenance and lets you operate from a small space.
Check up on your loan status:
If you have taken a loan and the installments are affecting the monthly cash flow then talk to your bank. Some of the banks will give you an option of halting for some days or can help you to increase the tenure and reduce the number of installments.
Plan your taxes:
Plan a meeting with your accountant at the year to discuss on income and expenses like shifting the receivable income to the next year for decreasing this year’s taxes. Your accountant will be the best guide! Accounting software can help you in planning your taxes well.
Hire the right people:
You can hire inexperienced people and train them for a month or two rather than hiring experienced people, as this could turn out to be more cost-effective (qualified people will ask for more pay). You can always go for experienced people when it is necessary.
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