Running an online business is an excellent way for a local enterprise to turn global overnight. It’s not without its share of expenses.
Small business owners have to be extremely careful about the way they invest their money. One small misstep could spell a financial disaster, even bankruptcy.
Hence why frugality is considered one of the most important traits a small business owner can have these days, so, if you want to become one, then be sure to check out these money saving tips down below.
1. Outsource Redundant Back Office Tasks
Hiring full-time employees for every single job at your online business is not only expensive but highly unnecessary.
Instead, what you should be doing is outsourcing all those redundant back office tasks to freelancers and contractors.
For example, you can use a site that specializes in experienced freelance workers such as Upwork to hire a virtual assistant to handle all your emails, phone calls, and other administrative chores.
IT support is yet another department you can fully outsource to independent contractors that are experts in the field to cut on needless expenses.
Additionally, if your business deals with e-commerce, a word of advice, don’t hire premium web designers to create and maintain your online store, but instead, use established e-commerce platforms such as Shopify to do so with minimal to no technical ability.
2. Streamline Your Software
Investing in new state-of-the-art software can significantly increase your business’s productivity and online security. However, it can also put immense pressure on your budget without adding any real value to your operation.
Just think about it, do you need that expensive accounting program to run your online business? Probably not.
Therefore, you need to take a long hard look at your overall software usage and weed out all the unnecessary programs your business can manage without.
Also, you should take the time to find other, less expensive, apps you can use to replace your more costly ones.
For example, you can replace everyone’s favorite software pack, Microsoft Office, with LibreOffice which is a fairly consistent open-source replica.
Besides, you can use software such as Trello for your project management needs, and Thunderbird for your email correspondence.
3. Consolidate Your Expenses
When running an online business, you neither have the resources nor the manpower to wage war on multiple fronts. Hence, you want to consolidate your expenses by bundling up individual services from a single source instead of using two separate providers.
For example, by employing a dedicated telecommunications operator such as Orange, you can merge your phone and internet expenses into a single bill, thus saving considerable costs.
Moreover, if you’re into retail then using a single source supplier to take care of your entire inventory is the way to go.
This will not only lower the cost of maintaining multiple supply chains, but it will also rid you of unnecessary paperwork and contract renewals with different suppliers.
Also, this will allow you to build a long-term relationship with your chosen supplier increasing the consistency as well as the quality of their service.
4. Work Remotely
Renting office space can easily eat away all your small business finances.
However, thanks to the marvels of technology, you don’t have to. With the help of cloud-based software, you and your co-workers can now work completely remotely, saving up on cash which would otherwise be wasted on expensive office space.
Another reason why this is so great for your company’s bottom line is the fact that you don’t need to spend any money on office furniture.
Also, according to this research remote workers proved to be more productive than your average office-based staff due to having more flexible work schedules.
Besides, if you have space, you can always convert a part of your apartment, or your garage, to work as a makeshift office. It worked for Bill Gates, so why not you?
5. Lower Inventory Costs
One of the most common mistakes of online sellers is needlessly stocking on inventory. As a result, you quickly end up without the money, or space, to keep your operation afloat.
Now, remember that long-term relationship we established with our supplier? Good, because we’re going to need it for our just-in-time inventory system.
Virtually, this method almost erases the cost of holding inventory altogether as it doesn’t rely on you keeping everything in your warehouse at all times.
Instead, it allows you to order things from your supplier only when you need them momentarily.
Two other ways of lowering inventory costs include: getting rid of old stocks and narrowing down the number of products you have on offer.
At the end of the day, “a penny saved is a penny earned.” Get the most out of your online business by cutting all those unnecessary expenses and reap the benefits of your labor.