5 Simple Yet Effective Things That SMEs Can Do to Save Business Costs
Business costs and SMEs have never been the best of friends. After all, managing budget and cutting costs are some of the biggest challenges that startups and smaller enterprises face. Furthermore, with the COVID-19 and limited operations and income, businesses that were already very efficient with their budget have been forced to improve on the department. Well, no matter what your reasons, we present some very effective tips for SMEs to save business costs.
A Budgeting Plan
The first requirement for effective budget management is having a good budget.
Many SMEs just go with the wind without planning a good budget. Moreover, some have a budget but they are not just strategic. Additionally, the problem with many companies is that they only account for the profit or loss, but fail to record factors like overspending, cash flow, variable costs, seasonal businesses, and miscellaneous costs, etc.
Thus, the first thing to do to save business costs is to review your budget. If needed, you can take help from a budgeting service provider. They will attribute every asset and liability to give you a realistic and accurate estimate. They will help you understand and control the money matters in your company in a better way.
Outsource Some Tasks
Outsourcing is an underrated, yet one of the most effective ways to save business costs. It is when you engage an individual or a company to do some of your tasks, without hiring them full time.
When you outsource, you don’t have to pay the salary or the benefits. Rather, you only pay for the tasks the service provider does, which gives you more flexibility on how you spend your company money. You can outsource for many kinds of jobs like accounting, secretarial, digital marketing, etc.
Digitize Your Operations
Information technology is one of the best investments you will make in today’s time. It saves both your budget and time.
When you accomplish various business processes digitally, you save a lot of money when compared to how much you would need to pay if you did the jobs in a traditional way. Furthermore, the results are more effective. For example, accounting software is far more efficient than a traditional pen and ledger accounting.
When you digitize processes, lesser manpower can do the tasks and they can do it in a short time. You can use technology for processes like marketing, accounting, HR, payroll, etc.
Shared Workspace and Renting Out
No matter if you have your own office space or are renting, in the starting phases, try to make your office area as small as possible.
Rent in Singapore is one of the highest in the world. Thus, for SMEs and startups, rent is one of the more significant expenses.
If you have limited manpower, it would be a great idea to opt for shared workspaces. If possible, allowing your employees to work from home would also be a great idea. On the other hand, if you have your own building, you should consider renting most of it to tenants, which can be a strong source of income.
Buy Second-hand Equipment and Resources
Again, managing the budget, most of the time, depends on how you understand assets and liabilities. When your company is still small, the business must be your major focus, rather than the interior design or the model of your equipment.
You should only buy things if you need them. As long as an item does not affect the quality of your product or customer service, try to buy the cheapest one. For example, if clients don’t really visit your office, a chair would do, instead of a sofa.
Furthermore, instead of buying brand new things, you should mostly look for second-hand items. The quality assurance check could be a hassle, but again, saving money is a priority.
You May Need Professional Help
For the best results for saving money for a business, you should have a well-worked plan. It helps a lot to work with a budgeting professional. They will factor in all your expenses and profit and give you exclusive tips on how to be more careful with money. After all, different companies need different strategies.
Contact 3E Accounting for the best financial planning and advisory services in Singapore. We will help minimize your expenses and loss while maximizing your business gains.