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Although it is widely regarded that death and taxes are the only certainties in life, those who run a business know of expenses. No business manager likes to see the costs. As a business owner, you should always be looking to minimize costs as much as possible – without compromising safety and integrity, of course.
Accountants are widely employed to scrutinize a business’ income and outgoings, but they can be expensive and, in many cases, unnecessary. While no one suggests that accountants don’t have their uses, they may not apply to your business as much as you may think. For example, keeping track of finances is made easy with modern apps.
Other ways you can save money covered here, include:
- Effective management software
- Using free software
- Embracing the paperless office
- Employee and client retention
Use Management Software
Any business knows that legal issues can all but eradicate a company. Insurance, copyright, and embezzlement are common issues with which a modern business has to contend. But there are obfuscated problems that can begin relatively small and end up causing a massive legal headache if not promptly addressed.
For example, employee resignation or termination can cost your business dearly – up to $4,500 per member. This is because filing for unemployment passes their payment cost to you. Unemployment claims management software can help. Specialized software like this keeps track of all terminations or resignations and actively tracks costs incurred.
Make Use of Free Software
Any business, small, medium, or large, can make use of free stuff. Software licensing is one of those everyday expenses that almost every company is aware of, and some of them are almost scandalously priced. However, you may not be aware that some of the best software is free.
Take Microsoft Office, for example. You may need to shell out for an expensive volume license and renew it annually. However, Google Apps offers a similar package that is almost a good as MS Office, absolutely free for commercial use. For the most part, you won’t need to pay a penny, but you can add extra features at additional costs.
Other excellent free software includes:
- GIMP – powerful, free image manipulation program.
- Avira – high-end free antimalware.
- Linux – various versions of free operating systems.
- Free CAD – excellent CAD software.
- Lightworks – superb video editing program.
- Mautic – powerful, free email automation.
- Wave – free financial software similar to Quickbooks.
- Blender – a great alternative to MAYA and 3DS Max.
Of course, some of the best packages will cost money, and you might eventually require them. But for a startup when money is tight, some alternative free software should be good enough to get you through until you can afford more robust, industry-standard packages.
The same could be said about the hosting for your website, however, there is a difference here. If you decide to start with a free website, you will be restricted with what you can do. In the long run, it might be better to start with some cheap hosting rather than free hosting. One of the main reasons is the freedom that you are granted with a self-hosted platform. Not only will you be completely in charge of the content, but you will also have something which is completely yours. Unfortunately, when it comes to free websites, there is not that level of choice.
Self-hosting also allows you to customize your website name and make it appear more professional to potential clients and customers. If you decide to cut costs by using a free platform, you run the risk of putting people off with a Blogspot or Wix address in the address bar. You can see how this might be off-putting to people. In a world where first impressions can make or break a business, you are better at putting your best foot forward with a customized address and self-hosted website. In some places, it can be a good idea to trim back the costs, in others, you will need to spend a little money in order to make a lot.
Outsource Where You Can
The employee wage bill is the biggest cost a business has. But this can be reduced significantly by outsourcing departmental work wherever necessary. This doesn’t mean drafting the help of unqualified and belligerent individuals from another country. There are tons of outsourcing services available across multiple disciplines.
An excellent example is managed IT services. These companies provide IT and network-related services at a fraction of the cost of hiring a full-time, in-house network administrator or cybersecurity expert. Call answering services are another great example. Hiring a floor of qualified administration personnel is a considerable expense, so take advantage of a service that already employs professional admin staff who can do it for you.
Explore the Paperless Office
One of Bill Gates’ personal and professional goals is to eradicate paper from the office, which is why Microsoft invested so heavily in their flagship office programs. The reasons for Bill are personal, but the principle applies to everyone, especially in today’s world of carbon footprint reduction and sustainability goals where the reduction of waste is a priority.
There are many ways that you can reduce costs by implementing a paperless office. Electronic comminution only rather than printed materials is a prime and practical example. Apps like Note, DropBox, and even email clients are widely used. In addition, you could consider digital business cards with apps like SnapDat and encourage employees to take notes with smart devices instead of paper pads.
Retain Clients and Employees
While paying employee wages is a considerable expense, losing an employee can be just as significant. The cost of replacing a talented employee is considered equal to that of one year’s salary for that employee. This is because you will need to initiate a costly and complex campaign to locate someone equally skilled. You will then need to train them in company procedures, pay a recruitment company to go through various procedures, and suffer losses due to a vacant position.
Additionally, losing a client can be an expensive affair. Loyal clients who engage in repeat business tend to spend around 60% more than standard clients and are essential for maintaining high income. Should a client of this nature be lost, it could spell disaster for your revenue stream. Building trust and consistently delivering on promises will help ensure a long and happy relationship.