3 Areas Where Businesses Can Save Money Without Cutting Corners
In these hard economic times, small businesses and large ones alike must do everything in their power to not only survive, but also thrive. While accomplishing this though, you do not want to cut corners. As the age old adage goes, you want to measure twice and cut once. You may spend more time ensuring the cut is accurate, but you are not loosing money on material lost by the cuts being the wrong length.
With that said, lets go over 3 different areas where a business can save money without cutting that proverbial corner. The 3 areas we are going to cover are Marketing/Advertising, Employees, and Overhead. Its uncertain how much can be saved, as it depends on the business, but a penny saved, is certainly a penny earned.
Search Engine Optimization: There are numerous companies available that offer SEO, though they can be expensive at times. However, with a little research, any business can optimize their own webpage and go through the motions to rank higher for specific key words in search engines. It may take some time, but once you become familiar, it’s quite simple and very effective.
You have to figure, if you spent the time and money to build a website for people to view, people need to view the website for it to have any impact. If traffic is not driven to your website via search engines such as Google, than its as if you had a brick and mortar store front, with nobody entering.
Email Marketing: Some people believe that email campaigns have begun to fail, just as direct mail is believed to have done in the past. Though, just as direct mail, email-marketing campaigns are still effective if directed towards the correct demographics, and for the right reasons. Direct mail is still very popular for coupon campaigns, as people may not use snail mail themselves, but they still love to save money given the chance.
Email campaigns are quite useful as there are no costs associated with sending them out. You can target specific customers dependent on how your database is set. The only problem is that fewer and fewer people view spam mail. So what you send has to be personal, which takes a little planning. But if done correctly, it’s a free means of advertising, and you can target any number of people. The only hard cost associated with it, is the time spent creating the campaigns.
Social Media has become one of the most popular means of advertisement nowadays. Whether it’s Facebook, Twitter, Pinterest, Google +, Tumblr, Hubpot, Blogger, BlogSpot, or Trendit, there are countless outlets for your business to gain recognition through.
Again, as the same is with email-campaigns, there is no cost associated with using these social media outlets, but time is needed to do it correctly. You need to get customers to sign up to these, but convincing them of this is easier than you might imagine. Giving away a free cup of coffee or promising deals in the future is enough for most people to sign up.
Students are often in need of work experience in a given industry. They provide a low-cost means for a motivated employee. Some would say interns should work for free, however, nothing in this world is free. Also, if you’re one to employ a student without some form of compensation beyond experience, you should be ashamed of yourself. That shows you don’t care about your employees as a whole, or value the work that the intern is doing.
What is being proposed here, is that rather than having 4 full time employees only have 3 with one intern. Having the intern pick up the less important tasks around the business. You will still save money, and not come off as a greedy penny pinching employer. What you are essentially doing is paying for experience. The more you know, the more you’ll get paid. An intern, having very little experience, obviously doesn’t deserve the pay that other, more qualified employees have.
Most business experience lulls and peaks in their sales, dependent on certain times of the day, week, month or year. Very few businesses experience sales evenly throughout the day, all year long. So it only makes sense to have full time employees if they are always going to be busy. But if there are times where it’s known business will be slow, there is no point having a full staff sitting and waiting for business to pick up.
Determine what the lull and peak sale times are for your business, and plan accordingly. You may be able to reduce staff during certain periods, which if done, can save a tremendous amount of money.
This may seem obvious, but as obvious as it is, many businesses still treat their workers as an expendable commodity. Meaning that if one quits, they can just hire another because there are numerous people searching for jobs. However, this is counter-intuitive for two reasons.
One is that employees are the soul of a business. They are the ones that deal, face to face with customers on a daily basis. If your employees are not happy, chances are the service they provide will not be good either. So disgruntled employees result in un-satisfied customers. If employees feel they are not respected at their job, they are likely to not care whether they keep the job, nor take pride in the work they do. This all becomes noticeable when they interact with customers. Remember, a customer only needs one reason to not use your services again. After all, think of what it took to get them to buy from you in the first place
The second is you have to take into account the time it took to train a particular employee, and how much was spent on that. If a business has a high turn over rate, they are throwing money away hand over fist. There is money lost both in the training process and the lack of work being accomplished or done correctly due to a lack of knowledge. Also, employees are not slaves and shouldn’t be treated as such. If you treat your employees with kindness, fairness, and respect, the work they provide will undoubtedly be of higher quality.
Buying in Bulk
You can save a good deal of money by making your purchases in bulk. Though, the only time this works is when you know you are going to be able to sell the entirety of the order. It doesn’t do any good to purchase more than demand dictates, as that does not reduce overhead, but rather makes it more unmanageable.
Also, this only works when what you are purchasing in non-perishable. Again, if you know you can sell it in time, then that’s all the better, but otherwise you will simply be wasting product due to spoilage. You can also work in conjunction with other businesses to make purchases in bulk, this works well for restaurants when they want the reduced price, but cannot sell enough before it goes bad.
Just In Time Inventory
Just in Time inventory is the exact opposite of making purchases in bulk. It is when you either order the product after the sale has been made, or know exactly when sales will be taking place. You have to imagine that if you spend money on inventory that sits around waiting to be sold, that was money that could have been spent elsewhere. If you have $400 of merchandise that won’t sell for another month. That $400 may have been better spent on marketing or raising employee moral.
Purchasing inventory once a sale is made can only be done for certain products such as custom-made and tailored items. Anticipating when the sale of certain items will take place may be a bit difficult if you have no history to go off of. But if a business has been in operation for some time, there will definitely be trends, which if studied, can tell you when certain inventory items are needed.
Drop Ship Inventory
Drop ship inventory shouldn’t be considered inventory at all as the name is misleading. But if this option is a viable one for your business, it literally reduces the overhead cost of inventory to nothing.
Drop ship inventory means that when someone buys an item from you, you then purchase it from the manufacturer and have it sent to the customer immediately. The product never has to actually pass through your businesses hands. In essence, it means you are the middleman. You’ve essentially made money by making an order on the behalf of a customer, and charging them for that service.
This is common for online clothing outlets, and wholesale sites. They never actually have an inventory in house; they essentially sell the service of bringing products to the attention of potential customers. In that sense, they are nothing more than a marketing agency, marketing without the needed consent of the manufacturer.
Hopefully some of these steps will help to reduce the costs associated with your business. The thing to take away from this is that there are numerous avenues which all lead to the same place. So long as you choose the right path, you can cut costs, without cutting that proverbial corner.
This article was written by Damien S. Wilhelmi, an online marketing guru, SEO upholder of White Hat law and self acclaimed idiot. I am writing on behalf of Premier Trade Solutions, a Purchase Ordering Finance company.