If you’re running a small business, you might be feeling the pressure of uncertainty in our current economy. And because the range of possible outcomes can seem vast, you wonder, is it even worth having a plan for things that may or may not happen? Or should we brace for impact and hope we’re still standing when it blows over?
While it may seem like a losing battle to plan for the unknown, it’s recommended to have savings strategies to help conserve and protect your hard-earned money.
Below are some small business saving strategies you can deploy during uncertain economic climates.
1. Cut Unnecessary Expenses
Review and evaluate your current expenses to identify areas where you might be able to reduce costs. To start, audit your energy usage to see if implementing better energy-efficient processes can reduce utility costs. Depending on your business, telecommuting, flexible work arrangements, or a virtual office can also reduce or eliminate expenses. Also, canceling any subscription or membership services you can function efficiently without may be beneficial.
2. Negotiate Better Rates
Don’t be afraid to negotiate better deals with suppliers, vendors, and service providers. Uncertain economic times can be an excellent opportunity to shop around and see if others can offer more competitive pricing. Your existing partners may also see this as an opportunity to provide better rates to retain your business.
3. Increase Efficiency
Identify bottlenecks and inefficiencies in your business processes and implement solutions to help streamline them. First, automate repetitive tasks, such as invoicing, scheduling, and data entry, and outsource tasks not core to your business to free up time and resources. Then, continuously evaluate your process, measure progress, and make adjustments as needed.
4. Diversify Revenue Streams
Consider offering new products or services to your clients, expanding into new markets, and exploring partnerships or collaborations with other companies. You can also create recurring revenue through subscriptions, renting out space or assets, selling digital products, or offering consultant or coaching services. Getting creative with your revenue streams can help reduce your reliance on any single source of income.
5. Explore Financing Options
There are many unique and traditional financing options for small businesses. Look into government grants or loans, like the SBA loan, or consider crowdfunding or private financing options. You may also want to review and renegotiate existing leases and loans for additional savings.
6. Leverage Technology
Many software tools and online platforms can help you optimize your processes and make managing your business easier. For example, CRM (Customer Relationship Management) and automation software help make simple, repetitive tasks easier and faster, reducing labor costs and sometimes eliminating the need for certain positions within the business. Look to technology to optimize or automate your current processes, then train your team to do what computers can’t.
7. Consider Temporary Cost-Saving Measures
If your business faces a short-term financial crunch, you may need to implement temporary measures such as furloughs and reduced hours. You can also utilize free or low-cost marketing channels and postpone pricey marketing efforts that don’t have a certain or immediate ROI. Throughout the process, be sure to communicate openly with your employees.
Whether you’ve navigated the ups and downs of the economy for many years or are new to small business ownership, a financial planner can help you explore your options and develop the best plan for you.
Do you have questions about helping your small business save during uncertain economic times? Contact Matt Barber, director of SignatureENTREPRENEUR, today!
SignatureFD is a financial advising firm headquartered in Atlanta, Georgia. We believe in helping our clients achieve wealth beyond money. Our team of investment, financial planning and tax experts are committed to proactively helping clients take control of their financial lives and achieve their goals.
Matt Barber, CFA®, CFP®, is a partner, wealth advisor, and director of SignatureENTREPRENEUR®. Barber specializes in working with business owners to develop a coordinated plan to taxes, develop a succession plan, and ensure appropriate asset protection. He is a member of the University of Georgia Financial Planning Alumni Association and the CFA Society of Atlanta.