If you want to save money, just give up your daily coffee at Starbucks!
Next to cutting back on avocado toast, this is one of the oldest money-saving tactics in the book. But I will admit that it works sort of. Its good advice for a student who wants to give their savings account a boost, but for an entrepreneur running a full-time business saying so long to Starbucks is more about vanity savings than anything else. (Especially since a startups early stages does require some caffeine.)
If were excluding Venti lattes, what can small business owners let go of in order to build up their cash reserves? Heres how to get strategic, rather than going cold turkey, when it comes to spending habits.
1. Start outsourcing
In 2016, the JPMorgan Chase Institute conducted a study analyzing the small business sector of the economy. The small businesses surveyed were revealed to only have 27 days worth of cash buffer if inflows stopped. Living month to month without a financial safety net has made it difficult for these companies to expand their operations a predicament made all the more worse by the fact that small businesses account for 50 percent of new job creation.
If you find that your startup is in a similar spot wanting to bring on more employees, but unable to afford full-time hire expenses you might want to consider outsourcing duties. Seek out contractors on sites like Fiverr or TaskRabbit who specialize in anything from writing blog content to conducting outbound calls. You can reap the expertise of freelancers while putting aside extra money for your business to create a nest egg or even hire your next employee.
2. Trade small costs for large gains
Business in the summer months is notorious for experiencing a phenomenon known as the summer slowdown. Sales are a little lower and the workload is less intensive which makes for perfect timing since everyone is heading OOO on vacations. How can you save money when theres less to cut back on?
The answer is simple: trade small costs for large gains. On the busy and even semi-busy days you do have, inspire your team to push a little harder. Order lunch in and get a contest going for sales that you can encourage your team to go all in for. Here, lunch is the small cost and the large gain are the sales. Its a financial win-win for business and your team, as it gets everyone pumped up and motivated during the dog days of summer.
3. Strategize on travel expenses
According to the Global Business Travel Association, global business travel spending in 2016 hit nearly $1.3 trillion. Now more than ever, entrepreneurs are hitting the road, grabbing a flight, and booking a hotel room all of which adds up very quickly if youre not careful.
Before you say bon voyage, do your homework for snapping up the best deals. Here are a few traveler-friendly tricks to get you started.
Travel for business frequently and struggling to maintain a hotel budget? Consider booking an Airbnb instead for an affordable space that is roomy, gives you the opportunity to cook in rather than eat out for every meal, and (usually) includes free WiFi.
Take a page from the millennials guide to travel and start hunting for values. Crowdsource on Facebook, leverage travel sites like Expedia and Kayak to compare expenses and packages, and even root out hidden discounts for hotels via their social platforms and by signing up for newsletters.
Utilize apps like Hotel Tonight for last-minute overnight stay deals, Flight Stats for flight updates including delays, and Skyscanner as your ultimate international destination search engine.
4. Plan ahead daily
What if you find yourself doing all of the above, but youre not making much progress on saving extra money? The key then is not to continually give up everything until your business is just a laptop in an empty studio. Its to plan ahead on a daily basis.
Thoroughly review areas that you can cut back on and make adjustments on each day. In terms of your business, look back on what has and has not been providing a return on investment and make the adjustments accordingly. In terms of the space your business exists in, make small tweaks like using natural lighting instead of keeping tons of lights on in your building.
You might also find that in order to make money, youll have to spend some first on upgrades for your website or marketing plans and thats a good thing because it allows you to invest in yourself as much as you do the business.
Keep your coffee and think in advance rather than spending on the fly your bank account will (eventually) thank you for it.
Deborah Sweeney is the CEO of MyCorporation.com. MyCorporation is a leader in online legal filing services for entrepreneurs and businesses, providing start-up bundles that include corporation and LLC formation, registered agent, DBA, and trademark & copyright filing services. MyCorporation does all the work, making the business formation and maintenance quick and painless, so business owners can focus on what they do best. Follow her on Google+ and on Twitter @mycorporation.