A small business’s first year of operation can be a tumultuous time. Recruiting talented staff, finding effective avenues of promotion and building a steady client base are just a few of the herculean tasks that fledgling small business owners have to tackle during this crucial period. Unsurprisingly, money is typically an issue for small businesses scrambling to make a name for themselves. In order for a fledgling enterprise to stay afloat throughout its first year, smart spending practices need to be adopted. However, entrepreneurs with little to no experience in this area have a tendency to overspend and saddle themselves with insurmountable debt. Small business owners looking for effective ways to keep spending under control are urged to adopt the following measures.
Invest in Supply Chain Finance Tools
Not every small business owner is an experienced money manager. While some entrepreneurs have strong financial backgrounds, many fledgling business owners have very little fiduciary acumen. If you fit into the latter category, you can benefit from enlisting the aid of a seasoned financial advisor and investing in supply chain finance tools. A better sense of how to manage your money and the ability to develop a long-term financial strategy are sure to serve you well in the business world.
Place a Limit on Full-Time Hires
With economic uncertainty at all-time highs, wanting to provide local jobseekers with full-time employment is certainly admirable. However, many fledgling enterprises have neither the capital nor the scope to take on a large number of full-time hires. Paying a smattering of full-time salaries while still waiting for customers to discover your business is liable to place a tremendous strain on your finances. With this in mind, limit full-time hires to positions that are absolutely essential. Of course, this isn’t to say that you can’t expand full-time hiring once your enterprise has more capital.
You can also instill loyalty from contractors and part-time hires by rewarding consistently high performers with eventual full-time offers. Since people who lack the security of full-time employment are understandably hesitant to commit to companies that could drop them at a moment’s notice, providing these individuals with something to work towards can help bring forth their best efforts.
Allow Team Members to Telecommute
As a growing number of businesses are discovering, telecommuting is a perfectly feasible option for a large percentage of the workforce. Thanks to new and emerging technology, virtually any desk job can be done from the comfort of one’s home. Unfortunately, many business owners disparage telecommuting, as they believe it stands to make employees less efficient. However, as a growing body of research reveals, this is far from the case. Furthermore, with the COVID-19 pandemic likely to be a threat for the foreseeable future, allowing employees to telecommute helps curb the spread of the virus and potentially save lives.
Telecommuting can also serve as an effective cost-cutting measure. The more employees you have working from home, the fewer amenities you’ll need to provide at the office. Depending on the size of your staff, this stands to dramatically reduce food, beverage and office supply costs. Furthermore, having fewer employees present day-to-day means you’ll be able to lease a smaller workspace, thereby reducing your monthly rent costs.
Explore Free Avenues of Promotion
Purchasing ad space in print publicans and buying commercial spots on local TV and radio outlets can make short work of even the most robust promotional budget. So, in the interest of preserving some capital, you should consider making the most of free promotional tools. Social media, in particular, can be an effective way to spread the word without putting a dent in your finances. If you haven’t already done so, create accounts for your enterprise on every popular social media mainstay and make an effort to post daily updates designed to encourage sharing and audience engagement.
To call a small business’s first year of operation an uncertain time would be an understatement. During this period, business owners tend to wear a variety of hats. In addition to acting as recruiters, promoters and client-schmoozers, they’re often required to step into the role of money manager as well. It’s not hard to see why so many small businesses experience financial hardship throughout their first year. Unless your enterprise is an overnight success, it can take a long time for customers to discover what you have to offer. To help ensure that you’re able to stay afloat long enough to see your business become solvent, put the cost-cutting measures discussed above into practice.