Do you need more cash flow? There are two ways to do that: increase income or reduce expenses. If you can’t raise your prices (or you’re afraid that you’ll lose customers if you do), you can get more money back into your business by cutting down on unnecessary spending. Here are some suggestions.
- Eliminate (or Reduce) the Need for an Office
In Singapore, 72% of businesses say they are affected by higher rental costs (based on the SBF National Business Survey 2013/14).One way of reducing this rental cost is by letting your team work virtually. When you think about it, does your entire staff really need to be located in-house? Rental rates in Singapore’s CBD are at a record $9.88 per square foot per month. By allowing your team to work virtually, your business could save over $17,000 per year per person. Allowing your staff to work from home does require some initial up-front costs, such as equipping them each with a laptop and a printer, as well as expenses for setting up software for teleconferences, file sharing, and internet service that will offset some of that savings, but you’ll still come out ahead in the end.
- Outsource for the Services You Need
High labour costs is the top challenge faced by businesses in Singapore (SBF National Business Survey 2013/14). Full-time staffers are one of a business’ largest expenses, but they’re not always necessary. Before you take on the expense of hiring a new full-time employee plus benefits, consider what your needs really are. If it turns out you just need another set of hands to work the cash register while you pay bills in the back, a part-time employee can fit the bill. Depending on your business, interns and independent contractors can also give you the support you need without the commitment and expense of a full-timer.
- Negotiate a Better Merchant Processing Rate
If the bulk of your payments are credit card transactions, you’re probably paying hundreds of dollars in transaction fees to your merchant card processor for the privilege. But did you know these fees are sometimes negotiable? If your number of transactions has increased, you may be able to leverage that fact to get a lower percentage per transaction fee. Also, pay attention to your itemized monthly statement to ensure you’re not being charged for, say, a credit card terminal you’re not using. And if you can process your transactions online or using a mobile device, it may be cheaper than using a terminal.
- Use Free or Low-Cost Business Apps and Software
Many common tasks that used to require pricey software suites can now be done using low-cost productivity and marketing apps. Mobile apps are available for managing contacts, staying on top of projects, and making business travel easier — all right from your smartphone or tablet. MailChimp makes sending email marketing messages turnkey, and Evernote puts everything you need to write, research, collaborate, and present in one package. Both have free versions. Take advantage of them.
- Buy Inventory in Larger Orders to Save
Rather than ordering the products you sell each month, consider ordering more, once a quarter. Then ask your supplier to negotiate a lower bulk rate for the bigger order. If they’re not willing to do that, shop around for better pricing elsewhere.
- Upgrade to Better Technological Solutions
Take a hard look at the technologies you rely on every day and see if there are better, less expensive alternatives. Do you really need a landline? With VOIP as an established and competitive solution, using Skype or other services for phone and video calls makes fiscal sense for a small business with a small budget. Depending on how many employees you have and how much you and your staff use the phone, you could cut your current landline bill by as much as half. Maybe you’ve been using the same web hosting service forever and have been paying more than you need to. Web hosting is now a fiercely competitive market. Compare prices and services other providers offer, and switch to a provider that’s more affordable and with more cutting-edge options. For example, GoDaddy offers domain, website, and email hosting starting at $1 a month and offers innovative features like unique domain extensions (think .guru rather than .com) and search engine visibility services.
- Hit Craigslist for Equipment and Furniture
Before you pull out your credit card for that major equipment purchase, browse your local Craigslist to see if anyone’s selling what you need. Often, companies will go out of business and liquidate their assets through online classifieds. You can score great office equipment and furniture in fantastic condition at a fraction of the price it would be brand new. Also, keep an eye out for auctions and estate sales in your town.