When you first get your business up and running, money is often a concern. Even if you secure investors, they want to know how you’re using your money and if you’re spending wisely. If you’re trying to run your business as a sole proprietor or with a bare-bones crew, it’s even more difficult to keep a handle on where every penny goes.
Around 58 percent of organizations in North America and Europe say they expect their revenue to grow this year. However, more revenue isn’t helpful if your spending increases along with it to unmanageable levels. If you want to succeed as a startup, you must keep track of where the money goes and find ways of saving wherever possible.
Fortunately, there are some very simple ways to save your tech business money. We’ll look at seven easy-to-implement ideas that make a huge impact.
1. Reduce Office Space Rent
If your business requires more than a few workers, you likely invested in some shared office space at some point. While shared office space is a great stopgap for new companies, there comes a point where it is no longer cost-effective. Spend time factoring in the cost of paying your own utilities, Internet and insurance and compare to what you’re paying for shared space. The point where the two figures match is when you should seek out a commercial real estate broker and start hunting for your own space.
Keep in mind that you’ll also sign a lease of likely two years or more for commercial real estate. Make sure your business’ income is dependable and steady before committing to a long-term contract. However, as your business grows, you’ll find you save money by having your own space instead of paying premium prices for shared space. You may need to move to a different area with lower office rent, but your broker can help you find something in an area you desire.
2. Recycle Your Trash
Have you just been throwing out plastic bottles, soda cans and paper? In some areas of the country, you can earn a little money back by taking these items to a recycling center. Even if you don’t earn money from the effort, becoming a greener company is appealing to customers who also care about the environment and may gain you more revenue, freeing up cash for other endeavors.
Also, look for ways to reduce your carbon footprint and save money such as not printing out items that you can send digitally and focusing on reaching out to customers via email and phone rather than snail mail.
3. Seek Out Sponsors for Events
Throwing events is a great way to reach out to your local community or reach buyers at conferences. However, the cost of traveling to the location, offering freebies and staffing the event add up and may be cost-prohibitive to smaller tech companies. One way of combatting the expense is seeking out sponsors. For example, if you sell software to businesses to help them better track their customer preferences, you might team up with a beverage company to create promotional items with both your names. The beverage company gets the advantage of getting in front of your customers and you put on your event for much less money.
4. Choose Lower Cost Marketing
Marketing costs add up quickly, especially if you’re participating in magazine, radio and television ads. While these are valuable tools as your business grows and cash flow allows, if money is tight, it’s best to seek out the lower-cost alternatives such as social media campaigns and teaming up with smaller online influencers.
While you’re growing, focus on local marketing efforts. A recent survey showed about 82 percent of mobile searches are “near me” searches. Anyone looking for a tech company in their area is more likely to turn to you if you focus on local marketing methods first. You can always expand as your budget grows.
5. Cut Employee Costs
Paying salaries, benefits and keeping your best employees happy is time-consuming and expensive. Make sure you really have the need for a full-time position before adding one and that the employee will add enough value to offset the cost of hiring a permanent employee. Otherwise, you can use temp services to staff short-term positions and seek out freelancers to work as contract employees on one-off projects or to fulfill part-time work.
6. Watch Inventory
If you sell tech products, it’s easy to think the latest gadget will be the next big thing and wind up with a warehouse full of items that aren’t moving. Keep careful track of your inventory with smart software that tracks what you have, what is selling and what customers are likely to order at any given time. Clear out old inventory by holding special discount sales and reaching out to current customers with special offers if they make a purchase now.
Since warehouse space is costly, keeping your inventory under control also saves money on the space you need. The more fine-tuned you can get your inventory and ordering systems, the less cash flow issue you’ll have. No more product just sitting on a shelf and doing nothing for you.
7. Ask for Discounts
If a good customer of yours asked for a 10 percent discount, would you offer it so you could keep their business? More than likely you would and the same is true of the vendors you deal with. Pick up the phone and call everyone for a discount. This includes services your business uses such as data storage, Internet service, web hosting and products you order from suppliers. Ask each and every one for a discount or some type of money-saving measure. You may need to offer something in return such as paying upfront instead of Net-30, but the savings of 10 percent across everything can really add up.
8. Save a Lot by Saving a Little
These seven ideas should get you started on saving money for your business. Saving a little money here and there adds up to big cash over time. Once you’ve tried these methods, expand from there and look for other small ways to keep your own cash in hand.
Lexie is a freelance web designer and UX strategist. She loves all things design and spending time with her goldendoodle. Check out her design blog, Design Roast, and follow her on Twitter @lexieludesigner.