Just as people need to save money for future purposes, businesses also need to save money for rainy days. Businesses save money by cutting costs and implementing money-saving practices that yield huge savings over time. Whether you run a flourishing or struggling business, you must understand the importance of saving money for business growth.
Here then is how to run your business on a tight budget to save significant costs:
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Encourage Referrals
Since advertising on radio and TV, as well as in newspapers, consumes a lot of money, you can save yourself significant advertising costs by asking satisfied customers for referrals. Customer testimonials are very powerful since it is tied to the credibility of the customer – meaning people will be encouraged to patronize your products and services just because someone they love and trust says so. Word-of-mouth referrals can save you millions in advertising costs over the year.
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Speak at Public Events
Whenever you are invited to speak at public events, people view you in the light of your business reputation. If your company produces beverage or bathing soaps, they will view you in the light of the quality of your products and how it has impacted their lives. Although your public presentation may have nothing to do with your business, attendees will be motivated to patronize your business based on how well they perceive your credibility at the event. Talk of free publicity.
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Invest in Solar Energy
If you are doing business in countries where electricity is not stable, you may have to invest in solar energy to generate power rather than spend millions on petrol or diesel. The huge cost entrepreneurs spend to fuel power generators is a major business killer, and most businesses fail to break even or generate profits since the cost of paying employees is dwarfed by fuel costs. To save money on fuel and government electricity, invest in solar energy and your business will wax stronger on the savings.
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Take your Business Online
You may not believe it; it is significantly cheaper to run an online business than a brick-and-mortar business. During the COVID-19 pandemic, most businesses shut down their physical companies and shifted everything online to save costs. With such moves, they no longer have to pay rent on rented facilities, enjoy reduced employee rates, and thrive on automated services that are done by software instead of paid workers.
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Outsource your Services
You can save millions of money from outsourcing your services than by paying employed staff to do it. With regular company employees, you pay – monthly salaries, health/housing/transportation allowances, office rent and operational costs, insurance coverage, severance package, and retirement benefits among others. But when you outsource to freelancers, you only pay for the services they deliver and nothing more – you plow the savings to grow your business in the long term.
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Take Advantage of Free and Used Products
You are not in business to impress anyone but to make money – so use free and cheap products if they would serve your purposes without compromise. If you are just starting out or struggling to find your feet in the corporate business world, you can purchase used office furniture, second-hand office equipment, and recycled products. This will save huge money that could have been spent on newer things.
You can also take advantage of free products and promotional services to meet your business needs – you can use the free version of most software without upgrading to the paid version if the free model meets your basic needs.
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Practise Prevention is Better than Cure
“Prevention is better than cure” is not just a maxim for personal living; it is also a pearl of business wisdom that can save you hundreds of dollars in the long run. Institute business practices that prevent equipment breakdown, resource wastage, time loss, and health decline among other things. You will find that it is cheaper to prevent damage to equipment than to repair or replace the equipment. So set up a work culture that prevents damage and loss rather than spending valuable money to restore.
- Bonus point
Do you know you can save significant business costs by hiring your own children and family members if they are qualified enough for a job? Do you also know that it is cheaper to hire teenagers for specific jobs than to employ married persons for the jobs? Do you also know that you can hire someone to do three related jobs instead of hiring three different people for similar jobs? Think about these and you will see how to save considerable business costs.