Cut your business expenses with these handy tips
New businesses rarely get out of the red within its first year. In fact, only 50% of new businesses make it to five yearsi. The typical reason for folding is that they run out of money. While growing revenue is important, a small business owner should never overlook trimming its costs. After all, your outgoing expenses are much more predictable and within your control than incoming revenues.
Here are some ways you can employ alternatives to cut out unnecessary spending:
High labour costs is the top challenge faced by businesses in Singaporeii. This is unsurprising, from a combination of employer CPF contributions, foreign worker policies and tightening of the labour market.
Instead of having your manpower work on routine tasks such as data entry and accounting, try automation. There are numerous user-friendly computer programmes and softwares that have digitised these business functions, not only freeing up your employees to perform more complex tasks, but also reducing human error in the process.
A new workforce development arising from technology is the growing mobility of the workforce. With a smartphone penetration rate of 90% in Singaporeiii, the increasingly popular Bring Your Own Device (BYOD) policy is a win-win for both employers and employees. Employees can work with a device that’s customised and familiar to them, while employers get to save costs on purchasing and maintaining devices. Companies with such policies in place save an average of $350 per year, per employeeiv.
With BYOD, you can also reduce hefty monthly operating costs of mobile subscriptions. Instead of a pricier 24-month mobile contract that is packaged with a subsidised handset, choose StarHub’s 12-month Business SIM Only plans that lets you save more than 50% while enjoying up to 3x the data and unlimited talktime.
Retaining all your tasks in-house does not necessarily reap cost savings. While it may seem that hiring an external vendor to manage jobs that can be handled internally will result in more expenditure, it can help you focus on the key areas of your business while leaving technical tasks to the field experts.
Besides, having such specialists in your payroll often results in underutilisation, as the work volume under their domain tends to be lower at a smaller company. Not only will outsourcing boost your business productivity, it will save you time (which equates to money) and generate even better results.
Rethink your office space
72% of Singapore businesses say that they are affected by higher rental costsv. Depending on the nature of your business, consider location and functionality of the office space.
A location within the Central Business District does not necessarily translate to convenience. In fact, vehicle congestion and high foot traffic at the CBD during peak hours can cause significant delays and inconveniences. Try mid-town campuses such as Singapore Science Park 1 and 2 or Changi Business Park where you can enjoy the same or better amenities without the hefty price tag of a CBD location.
If you have a lean team, you can opt for a coworking space where you can enjoy full office facilities at a fraction of the cost. Plus, you enjoy the bonus of networking with other tenants and even gain business opportunities.
Or better yet, go remote. With cloud technologies and multiple collaboration tools available, working from home may require some initial capital for such integrated systems, it will reap greater cost savings for you in the long run.
Any small business will face challenges trying to grow while simultaneously keeping costs down, but making smart decisions can produce sustainable results both financially and strategically in the long run. Constantly review your operations closely and look for areas to streamline your business, so that you can ensure the longevity of your business and achieve maximum bottom-line growth.