New businesses must find ways to maximize the limited capital at their disposal. There are a number of cost cutting solutions, however new businesses must be very careful. Cutting costs in certain areas can prevent your business from growing, or cause it to fail altogether. Here are four ways your business can cut costs without exposing itself to risk.
1) Buy In Bulk
It can be scary to purchase a large quantity of product when your businesses is still young. What if you can’t secure enough orders? What if there’s something wrong with the product? Even though your business is young, it’s important, and cost-effective, to commit to it fully. Instead of selling many products, sell only a few, and purchase them in large enough quantities to get a steep discount.
2) Get An Intern
Many small businesses are “in-between” on the number of employees needed. Maybe you can’t quite do all the work yourself, but having a second person is too much. College and university students are frequently required to participate in an internship in order to graduate. The rate of pay for interns is far below what a full-time employee would cost, and hours can be negotiated so that the intern is always busy.
3) Hire Inexperienced People
When you do have to make a permanent hire to assist with workload, consider hiring someone fresh out of school. These people are keen and don’t have the experience to demand the salary that a more established person has. Keep in mind that these people will only be inexpensive to hire for a little while, but maybe a little while is all you need to get your business off the ground!
4) Support Telecommuting
For most businesses employing only a few people, any office space is larger than it needs to be. There are costs associated with running an office, too. Providing coffee and snacks for employees can add up long-term. By encouraging telecommuting, small business owners can save a tremendous amount on renting office space and the expenses that are associated with running an office.
Even if your business doesn't yet have employees, any time an entrepreneur can save themselves a trip somewhere by engaging in a phone call instead, time and money can be saved.