Running a business, even one you’ve dreamed about launching for years, can be fraught with challenges. One of the biggest challenges is not just finding startup and continuing operations capital, but deciding when, where, and how to spend it.
Lack of money is often cited by entrepreneurs as a major hurdle to moving forward without annoying hiccups and false starts. This isn’t to suggest that innovators and disruptors are necessarily bad with cash. T. Rowe Price figures indicate more than three-quarters of corporate founders have a good handle on the dollars in their pockets.
Nevertheless, you can always look for ways to get more value out of everything you buy. Even if you’re rolling in profits, you owe it to all the stakeholders in your company to put on your frugal thinking cap regularly. Here are five strategies to nibble away at the edges of everything you buy for your organization.
#1: Scour online comparison charts before committing to big purchases
Paying for unexpected, new, and repeat expenses without conducting a little due diligence can significantly erode your profit margins. Instead of putting yourself in the position to overspend, make use of online comparison charts, “best of” articles, and “top 10” lists.
If you’re like most consumers, you probably do this with personal purchases, such as studying home warranty reviews or car insurance plan comparisons before signing any contracts. Yet ,you may not do likewise with your business buys. By carefully evaluating your choices, you can avoid the feeling that you’ve paid too much and gotten too little. Be careful to not fall down a rabbit hole, though; pick a few credible sources to look at to efficiently weigh your choices.
#2: Brainstorm less expensive ways to solve nagging human resources problems
If you’re a business leader, you’ll continuously bump up against benefits-related snags. For example, a huge issue among many founders is how to provide affordable healthcare options for employees. Yet, 69 percent of small companies lament that their rates continue to rise year after year, according to a Public Private Strategies poll. How can you manage to offer perks without hurting your organization?
One way to tame ballooning costs on non-negotiable items is by shopping around. Alternatively, you might want to talk with your workers to see whether they have ideas, such as being open to different healthcare plans and packages, such as ones linked to health savings accounts.
#3: Use professionals for their expertise
Is it possible to spend money in order to save it? Absolutely, especially if you make use of professionals. Tax preparers and accountants charge for their services, but don’t immediately dismiss them to take a DIY approach. Without proper experience and schooling, you could wind up spinning your wheels, only to have to hire experts to clean up your messes.
Let’s say that you’re a terrific rainmaker for your business, but you’re not quite handy with profit and loss spreadsheets and analysis, or contract writing. By outsourcing those duties, you give yourself more time to find and convert prospects. In other words, the money you spend up front could pale when contrasted with what you are able to earn for your business.
#4: Keep your tech stack up to date
Technology continues to advance, which is why you should always stay on top of updates for software you use. Plus, upstart companies emerge all the time, offering businesses like yours myriad ways to improve processes and streamline workflows. Even if you’re comfortable with the tech stack you have, you should still revisit newer tech from time to time.
What are you looking for during these explorations into the latest tech products and platforms available to brands? First, you want to see if a product could fix something that’s always bugged your team about your current software. For instance, maybe you have two systems that you love, but they do not “talk” to each other. Could investing in a different tech tool that marries the best of both of them on one platform make sense? Do the math. Often, modernization leads to fiscally measurable payback.
#5: Hire employees judiciously
If scaling your company is part of your future vision, you’ll need talented people from diverse backgrounds to help you reach your goals. At the same time, you can’t just keep adding people to the payroll. Part- and full-time employees are expensive to find, train, and keep. Therefore, before posting any job board ads, determine if you really need the position.
If you decide that it’s important to add to your crew, think about alternatives to bringing on employees. Could you work with a staffing firm to get the help you need, at least for a few months? Doing so could bide you time. Is it possible that an independent contractor might be suitable as an auxiliary team member? You’ll pay more per hour, but not have the overhead or trappings that come with adding an employee. Above all else, get creative. You may want to ask your team their thoughts. Who knows? The roles you need could be divided among current workers to solve your problems. Even if you give your staff bonuses or raises for taking on extra authority, you’ll be ahead of the game.
Stay on top of your business
When you’re on top of organizational spending, you’re able to stay on top of your business. Before you write your next check, take a moment. Are you sure you’ve exhausted all other avenues? If not, you may want to pause on your purchase to be certain you’re getting the most for every dollar you spend.