Because it is at the heart of every business, we have compiled some cost management tips your business use to save money.
Did you know that roughly half of Australian businesses that started in 2007-8 were no longer operating just four years later?
This data from the Australian Bureau of Statistics shows just how perilous the Australian small business landscape can be. It is for this reason that effective cost management is so important.
1. Reduce paper use
With so many alternatives to sharing information, reducing paper use can be one of the easiest ways to not only save money on technology, but also to reap efficiency gains.
Share your documents on shared network drives (hosted on a private or hosted server) to allow your employees to access and share documents easily.
Another option is in the cloud– cloud technology has vastly improved over the past few years, and is now a secure and extremely flexible approach to sharing documents both internally and with partners and clients.
2. Protect your data
The cost of data loss can be unfathomable. According to Acronis’ Global Disaster Recovery Index 2012, 33% of Australian small and medium businesses were not employing means of data redundancy. The cost of environmental disasters alone tallied average financial losses of US$366,363 a year, causing close to 80% of businesses impacted to fail in the following year.
Add to this the costs of spammers, hackers and other illegal digital intrusions, and the importance of data security and data redundancy is plain to see. We strongly recommend that someone be assigned responsibility for backups, firewalls, anti-spyware and keeping your security software up to date. It could just save your business. If you are unsure whether your data is at risk, we are happy to provide an obligation free assessment.
3. Advertise online
Whether you have an internal marketing department or outsource it to one of the (many) agencies out there, there are many compelling reasons to choose online over traditional advertising. One of the key features of online advertising is that there is a wealth of data available, with real accountability placed on agencies to deliver results.
Great agencies will be able to deliver reports that outline the Return On Investment (ROI) of any given marketing budget. Compare this with the costs and uncertainty in advertising in newspapers, magazines or even television and radio– sure, you may get an influx of business for a few days, but how can you measure whether it was worth the expenditure?
Be careful who you partner with. Look for guarantees and testimonials, and ask to see proof of prior work. The best way to select a great agency to help you with online advertising is through word of mouth or checking the list of Google Partners. Google tend to only work with competent and proven agencies, so your time and money are more secure.
4. Forget the landline
Landlines account for significant costs to small businesses every year, and are one of the easiest cost management tips using technology. Being able to communicate is crucial in reaching out to your suppliers, customers and prospects. Landlines are, however, extremely inefficient in both cost and flexibility when compared to VoIP solutions.
Most businesses who move to a hosted voice solution see cost savings of between 30-50% over traditional phone costs. There are many perks to hosted voice, but the most popular ones are the ability to easily integrate phones with CRM systems and only pay for features and phones that you actually need. We have listed the other benefits of hosted voice here on our service page.
5. Buying refurbished equipment
When equipping your workforce or office, buying refurbished items is a great approach to cost management. The perception seems to be that refurbished items are low quality or a risky investment, but in the majority of cases this simply is not the case. Manufacturers often offer refurbished desks, chairs and white boards that are usually in near pristine condition. Do you really need that shiny look that only lasts a few weeks anyway?
In terms of computing hardware, refurbished can be a liability given the business critical nature of laptops and computers– and servers are definitely a big no in terms of purchasing refurbished equipment. However, one significant opportunity to reduce computing hardware costs is to move application hosting to the cloud, in which case hardware normally considered as ‘old’ will simply act as a terminal, with all the resources being provided by high end computers in the cloud. See the next point for more on this.
6. Reduce capital expenditures
Depending on your business, technology infrastructure costs can rapidly end up impacting your cashflow. The costs associated with server hardware, licensing, labour, monthly maintenance and upgrades can easily begin to add up.
As an example, if your business software requires a local dedicated server, cloud application hosting solutions such as inCloud Application Hosting can save businesses up to $12,408 over 3 years. That is money that could be spent on marketing or sales, helping to grow your business. If you were to invest that money into advertising online (as seen in Point 3) that money would go a long way in terms of adding to your bottom line.
Other options exist of course, such as seeking equipment financing to better manage your cashflow, or cloud infrastructure. Cloud infrastructure allows you to leverage high-end hardware stored in secure data centers rather than manage it all in-house, with a variety of options based on your individual needs.
7. Accounting Software
There are few business decisions more important than investing in a good accountant. This is one of the key areas you will be thankful for later in your business, as managing your accounts can be a nightmare for any business owner. Furthermore, there is often a wide range of ways to offset expenses in order to keep the money you and your business work so hard to earn.
Accounting software can be expensive, and income and expenses can be hard to track. Luckily there are a number of cloud based solutions designed for small businesses that are cost-effective and very user friendly. Some public cloud software we recommend (and have no association with) include Saasu, Xero, and Freshbooks. If you are hesitant in storing your business details with one of these smaller players, you can always refer to our earlier point on application hosting and store your MYOB software on a secure private server. Your accountant will thank you for it.