There are many ways to fund business growth – how do you choose the right one for you? Use our blog series to understand your options and the advantages and disadvantages of each method.
Part 1: Clean Up Your House
Before exploring finance for business growth, it is good sense to check whether you already have access to cash in-house. Review each and every cost for savings, including:
Employees are a large cost – salaries, benefits, insurance and office space. Keep full-time staff to a minimum and outsource work to contractors or use temporary staff as needed.
Don’t replace leavers immediately – ambitious staff may pick up their duties with encouragement.
Map out a ‘model week’ for each role to ensure staff understand productivity expectations and processes.
Hire sales staff on a basic salary plus commission structure, to motivate them and to tie extra business outgoings to additional income.
Consider where automation can streamline mundane tasks.
Let executives book their own meetings and travel, or use a travel management company to save time and money.
Ask staff to suggest cost cutting ideas and projects. They may have clever ideas from their experience, and it will establish a culture of financial awareness.
Hire smart, inexperienced staff at entry-level salary, who are up-to-date with technology and keen to prove themselves.
Consider cutting down employee hours – some staff may prefer a four-day work week for a better work/life balance.
Other staff may value perks such as home-working, flexible hours, 2 unpaid days off per month, free social events, shared Spotify and Netflix accounts, employee discounts. This can lead to improved employee engagement and productivity, whilst reducing office overheads.
Retain high performers. Although it means investment in people, it avoids the cost and time of hiring and training new people and possible negative effects on team culture and energy.
Consider offering small amounts of equity to valuable employees to enhance their remuneration packages.This also promotes loyalty and aligns their interests with business success.
Identify peak times in business and cover them with parents seeking a few hours work during school hours.
Job posting sites and recruitment agencies are expensive and swamp you with applicants. Instead, post jobs on your social media channels and local university career centre portals
Cross-train staff to reduce boredom from repetitive tasks and add flexibility to your operation.
For simple admin tasks approach local career centres and colleges for students looking for internships to gain work experience. You might discover a gem!
Reduce energy costs significantly by shutting all computers down at night, having lights on only when required, and heating or air-con restricted to only the parts of the office that need it.
Use programmable thermostats to set office temperatures and motion sensor lights to save money.
Plug appliances into powerstrips that are easily accessible and turn them off at the end of the day.
Negotiate with energy suppliers for best prices, research collectives that supply cheaper energy through bulk buying.
Implement an energy saving strategy, such as upgraded lights, computers, phones, copier, and use fans instead of air-con in summer.
Choose an office with natural light if possible.
Negotiate lower prices with all existing and new suppliers to reduce monthly operating costs, from phone bills to rentals.
Always get several quotes. This includes for legal services, accounting, storage, shipping, rent. Most suppliers are flexible with pricing if they know you are looking for a long-term relationship
Track prices and buy in bulk when there are large discounts to save money on office supplies and equipment.
Cancel subscriptions for services and publications you are no longer using.
Pay off high interest debts first – negotiate annual payments on other debts to allow this.
Cloud software performing a wide range of functions such as Accounting, CRM and Sales Reporting has become a lot cheaper and easier to use.
Cloud-based platforms negate the need to purchase and maintain expensive hardware, software and data storage, and typically payment is per user per month.
Review and cutback ongoing maintenance costs, such as switching from a daily to a weekly cleaning service, with employees emptying their own bins.
For growing startups or established companies wanting to transition to a more flexible workforce, move to co-working spaces to lower overheads.
Use a cashback business credit card or one that offers genuinely good benefits.
For more advice see https://www.google.com/amp/s/www.entrepreneur.com/amphtml/71318
Outsource non-core activities to save lots of time and staff costs, and achieve quality results.
The ”gig” economy means you can easily access freelance experts for specialist tasks and projects, such as recruitment, web development and content marketing.
Plan your website content for the year, decide on all the blog titles and graphics, then order them quarterly, saving time, money and worry.
Research small business coupon sites for savings on items purchased often.
Many suppliers provide early payment discounts, take advantage of this when cashflow is strong.
Check vendors’ websites for partner discounts or just request them.
You can often save by being part of a larger group – investigate whether joining a trade association could give a better deal on insurance, legal and HR costs.
Create partnerships with other small business owners and save money by leveraging discounts on supplies and services that you all use, such as print services and waste management.
Partner with companies who want to reach the same audience to share marketing and event costs.
6. Go Green
Fix dripping taps or leaking toilets to avoid wasting (and paying for) over 4,000 litres of water per year.
Recycle printer and toner cartridges – many retailers have reward programmes for using recycled cartridges.
Make double-sided copies the default printing setting, and reuse any single-sided copies for scrap paper.
Limit travel expenses by balancing face-to face and virtual meetings, using tools like Google Hangouts or Skype.
The more you digitise your business the more you save. Go paperless – use tools such as Google Drive, Microsoft Office, Slack, and Trello for storage and remote communication.
Sub-let unused rooms or space.
Calculate your profit per product, research the market, and ensure your pricing is high enough.
Train staff to cross-sell when appropriate, and pay close attention to making your most lucrative customers feel valued.
However, customers who pay less but demand more support are costing you money. Negotiate a higher payment or find more profitable clients to replace them.
Review your credit control procedures to ensure clients pay within the credit terms. Always chase late payments the day they become overdue, with a process in place to encourage prompt payment.
Review stock turnover times and amend products that move slowly. Sell unused equipment and inventory through online marketplaces to free up space and release cash.
For more advice see https://smallbiztrends.com/2017/05/save-money-in-your-business-operations.html
Speak to a knowledgeable, experienced third-party for objective advice.
They may know of tax incentives, rebates, credits, depreciation policy, grants or other benefits for your business, such as on R&D investment.
Pay tax on time to avoid penalties.