Launching a small or mid-sized business for new entrepreneurs means starting several battles at the same time. ž
From work organization and project management to marketing and finances, there are many bases to cover if you want to grow and prosper.
While it’s hard to measure what aspect is more important, one thing is unquestionable: there’s no business without money.
In line with that, SMB-owners need to master financial management to ensure steady growth.
Wise spending and proper saving lie at the heart of smart financial management for rookie business people. In the rest of this article, you can learn some practical tips on staying frugal as an SMB-owner.
1.Save money on equipment
When you join the big players on the business scene, you think that everything you do needs to be grand. The truth is that you can get on with fewer resources than you might have expected.
In other words, you don’t have to show off in order to get noticed. The quality of your services and the value you give to your clients are more important than your furniture, inventory, and devices.
Instead of splurging thousands of dollars on these things, rationalize the budget for the items above.
For starters, turn to Craigslist or any similar local websites to get some second-hand furniture for your office. You can find some great items at the fraction of a price and properly furnish your working space.
Moreover, think about buying used computer equipment. Depending on your profession, you can make a list of priorities, devices-wise, and buy them in line with it. For instance, a software developer might need a top-notch desktop computer, while a content writer can start with a used laptop.
The less you spend on your equipment and inventory, the more you can put aside in your SMB emergency fund.
2. Postpone renting an office
New business owners often hurry to rent an office space. Indeed, having a working space separate from your home is a business symbol for many entrepreneurs.
However, this isn’t something that should be forced. When you’re still a freshman in business, every cent is sacred. Spending hundreds or even thousands of dollars on your office rent is a bad move at the onset of your entrepreneurial journey.
Therefore, wait with your office until your business sets off. Once you have enough assets to survive six months in case of a crisis, you can start thinking about renting an office. And even when you’re in that position, it needs to be a moderate place that doesn’t cost too much.
3. Be smart with borrowings
Smart financial planning is one of the key prerequisites of successful SMB management. Borrowing is one of the most important aspects of proper budgeting. Loans aren’t forbidden fruit, as long as they’re used for a good cause.
In that light, new entrepreneurs are allowed to borrow money for their business if these loans will help them get things going.
For instance, if you need a special machine to make products that will be easily placed onto the market, taking a loan to buy it is justifiable.
On the other hand, borrowing money to furnish your office or get a company car that doesn’t directly bring money is not a good choice.
Also, even if the loan you take is going to generate additional value, the installments and the payment plan need to be feasible, i.e. SMB owners need to be able to pay them without spending their last cent.
For example, in the US, if you want to take a loan from the SBA, you need to meet certain conditions to qualify for it. It’s a practical set of rules that protects both the lender and the borrower. Those businesses that fulfill them and get a loan will most probably manage to pay it off without problems.
4. Plan your employments wisely
Successful SMB owners sooner or later need an extra hand. Sometimes this means finding freelancers for some projects, and on some other occasions, hiring full-time employees is a better option.
The first thing that you need to bear in mind that you need to plan your employments wisely.
This includes making detailed calculations for every potential employee and collaborator. Legally speaking, it’s less expensive to share your workload with freelancers and part-time workers. For instance, when you hire a freelancer on Upwork, you’re obliged only to pay them for their work; no retirement plans, no taxes, just the agreed payment.
On the other hand, hiring full-time employees incurs significant additional costs for you, as a business owner. Because of that, factor in all these potential expenses and weigh between full-time employees and freelancers to find the most affordable solution for your company.
5. Organize your website properly
Common sense tells us that marketing is a must in today’s business world. But there are different forms of marketing for different types of business, and they don’t have to cost a small fortune to generate leads.
Let’s start with your business website. As the specialists from a Houston web design company put it, your website doesn’t have to be complex, but it needs to communicate your business services properly. So, keep your website simple, but easily navigated. Divide the website into several sections, including the blog. Make sure that your visitors can get back from every single page to thes homepage with a single click.
Moreover, indicate the prices of your services and products so that potential buyers can easily see them.
Keep the landing pages and checkout sections straightforward so as not to confuse them, as well.
All these details will help you improve the user experience of your website without spending too much money.
Staying frugal is the cornerstone of every SMB in the beginning. If you don’t waste your money on expensive furniture, devices, and marketing features, you’ll have more assets to invest in your business growth. And if you surround yourself with a few handpicked business professionals, you’ll be able to develop your venture in a sustainable manner.
