A small business is one that operates on a tiny budget. I have seen small business owners complaining about this. They tried to convince me that there’s hardly any financial leverage for them and it’s hard to operate with an inadequate budget.
I wasn’t convinced. I feel small businesses can grow multifold if they cut down on unwanted expenses. Owners should make it a point to lower operating expenses and identify the mistakes in their operation and management-level stratagem, due to which they are losing money. This article is a handy guide for them. So, those lurking here, keep reading.
Purchasing paid software
Digitization and automation are key to business success. Any business, regardless of their size, scale and the industry they belong, need to digitize their operation and introduce automation to eliminate errors.
Hence, it makes sense for a small business to purchase pricey software, right?
Purchasing licensed software is a thing of the past now, thanks to the availability of open source clones of paid software and secondly, cloud quickly becoming mainstream. You can even host webinars on Cloud. Look at Adobe. Photoshop, their most publicized product was downloadable and paid once. As soon as piracy reached its peak, Adobe made it accessible only via a cloud.
Small companies waste money by purchasing the software license. They’d have to buy the subsequent updates and worse, the software may be replaced by a new and more efficient army of software at a cheaper rate.
A combination of cloud and open source rocks for small businesses. They should only spend money for buying paid plugins of FOSS, not for buying the software itself.
Hiring full-time staff
This is another mistake, a number of small businesses have been making and cutting their chances of success by half. When you hire a full-time employee, you not only have to pay them a sizable amount but also retain them. Sacking them shortly after hiring could land you in legal problems and increase your attrition rate, which is not good for the long-term prospect of your business.
Crowdsourcing used to be popular. Now, it has given way to gig economy. It’s a cross between crowdsourcing and full-time freelancing. In gig economy, you hire a freelancer, but for a large project, rather for short-term work.
Gig employees are available everywhere. Find them and assign them the work that you would have assigned to a full-time employee had you hired them. The best thing about gig economy is you can tinker with it. For example, some businesses take a hybrid approach. They recruit in-house staff and have them handle large projects. But for minors works and quick fixes, hire gig professionals.
This way, they ensure the speedy delivery of the work, yet save money. If gig economy was not on your financial resolution list, add it now.
BYOD isn’t bad
BYOD is an acronym for bringing your own device. It is specifically for small firms. Large companies cannot risk internal data being accessed by third-party devices, so they are not open to BYOD. But small businesses don’t have a compartmentalized work atmosphere and in most cases, a flow of data within the organization is unrestricted.
Businesses hiring a hot desk, which allows for a plug and plays work environment on an ad-hoc basis, have become more and more popular amongst entrepreneurs and new business owners. The flexibility and cost savings are ideal for a new start-up business.
It is specifically for small firms. Large companies cannot risk internal data being accessed by third-party devices, so they are not open to BYOD. But small businesses don’t have a compartmentalized work atmosphere and in most cases, a flow of data within the organization is unrestricted.
The advantages of BYOD are so many to list up. First, they don’t have to purchase individual workstations. That’d save them a lot of cash. Second, they won’t have to ensure the machines as employees will bring their own. Two biggest advantage of BYOD is less strain on IT guys and employees bringing their own Wi-Fi devices.
Alongside benefits, there are some risks. While most of the risks are mitigable, having to buy cyber liability insurance could be a risk. It’s related to data privacy. The business pays the premium and if their data is stolen, they are reimbursed by the insurance company. This type of insurance is offbeat and technical clarifications are often hard to get.
Expensive marketing strategies
Small business owners tend to forget that they cannot adopt the same set of marketing strategies, normally adopted by large businesses. They unnecessarily spend so much money on marketing but end up getting little to no result.
For example, cracking AdWords requires a considerably high budget. Competitive keywords are pricey. And even if they get clicks, turning leads into sales requires a lot of effort and money.
The problem of running a small business is you can’t experiment too much with marketing and advertising because you can’t risk losing money. Hence, the window period for ROI tracking should be as short as it gets. For example, if you are spending on AdWords, but not getting the desired ROI, stop the campaign and invest the money in other platforms.
As a small business, you have to be very dynamic with the marketing strategies you employ and switch between productive strategies. If you are not doing it, you are making a mistake.
As a small business owner, you can’t be a cheapskate or overly reckless. You have to spend money wisely. The tips shared here can guide you in that.