If you’re wondering how to run your business on a shoestring after the start-up phase has passed, we’ve got a few tips here to help you save money and keep business growth sustainable.
Bootstrapping a business with the help of family and friends is a great way to keep costs down – you might also avoid having to take out high interest loans if they’re looking for a small financial investment.
It’s not always easy to run a business this way though – a degree of imagination and creativity is needed. But by making the effort to sustain a frugal approach you’ll have better control over cash, and a greater capacity to out-manoeuvre competitors.
So why not start with one or two of these ideas? They could make a big difference to day-to-day operations, and also to your bottom line.
#1. Target your marketing
You’ll probably have built a solid customer base by now, so boost sales and keep costs low by marketing to existing customers. If you haven’t already, set up and segment a database of customers according to their shopping preferences, birthdays, hobbies – anything that could help you reach out to each group with targeted emails.
It could even be worthwhile personalising your marketing according to individual customers rather than groups. People appreciate attention to detail – when you email a birthday offer or discount, they’ll feel valued and more likely to remain loyal.
The extensive reach of social media means that, even if you’re a local business, you can stay in touch with customers for very little cost. A simple Facebook page is all you need to post news, reviews and items of interest to potential customers, as well as answering their queries and complaints.
Assuming that your target market uses technology, whether you choose Facebook, Twitter or LinkedIn depends on where your audience can be reached. A local retailer would probably be best served by Facebook, whereas professional people are more likely to be found on LinkedIn.
#3. Outsource to save money
If the time has come to delegate a little, outsourcing can be cost-effective and flexible as long as you choose the right provider. You don’t want to be consumed by the day-to-day minutiae of business operations, and in any case, you should be working on your business rather than in it.
Bookkeeping, telephone answering and administration are just a few areas easily outsourced, so free up valuable time and avoid the costs and commitment of employing full-time staff.
#4.Try face-to-face networking
Old-school networking generally involves paying an annual fee to join a group, or for each meeting you attend, but there’s a significant benefit to giving your business valuable exposure to new people and ideas.
It might be easier to sit in your office and network, but apart from the new dynamic that face-to-face groups bring to your marketing, you’ll have the benefit of many business brains to help you solve your own problems.
#5. Ask satisfied customers to recommend you
There’s nothing quite like a good review to instil trust in others. If you’ve got a happy customer, ask them to recommend you or write a glowing review about your product or service.
You could offer an incentive if they recommend a friend. It doesn’t need to be expensive – just a token gesture to help build rapport, such as a discount for a future purchase and an introductory offer for their friend.
#6. Control how much inventory you buy
Once you’ve been up-and-running for a while, it’s easier to calculate the optimum levels of inventory needed to run your business efficiently. Although it’s a liquid asset, stock can be a drain on resources if it’s not sold quickly, and buying excessive levels uses up working capital unnecessarily.
Tying up too much money in stock also exposes your business to risk if its value falls over time, diminishing much of your profit margin.
#7. Try an email marketing strategy
If you’ve already built a marketing list, email is one of the quickest and most cost-effective ways to market your business. People can sign up to a regular newsletter via your website, but it’s important to get the tone of communications right.
If you’re contacting them regularly, the last thing they want to receive is a constant stream of messages asking them to make a purchase. Develop trust by offering solutions to issues you know they’re experiencing, and let them build up their confidence in you slowly.
It’s a good idea to vary the type of email – include occasional discounts and offers, and run occasional competitions to stir up interest in the business.
#8. Don’t forget your website
Making the most of your website is one of the most effective things you can do on a shoestring budget. Keep it regularly updated with interesting content by starting a blog. Not only will you appeal to your target market, you could rise up the search engine rankings without having to pay for advertising.
You’ll widen your reach by linking to social media accounts and commenting on other blogs that your customers read. Don’t make the mistake of over-selling though, keep blog content useful and relevant rather than thinking of it as a tool for selling.
#9. Keep an eye on fixed costs
Paying out for space that the business doesn’t really need is wasteful and will limit growth. It’s important at any stage to allocate money carefully, so if you have to operate from rented premises, make sure the cost is low and in proportion to income. Think about working from home if you can – you may be able to deduct a proportion of your expenses for business use.
Stretching resources in this way isn’t easy. There’s always a temptation to spend more money once the start-up stage has passed and you’ve more confidence in your ability to make sales. But be creative and you’ll find your profit levels increasing sustainably over the long-term.
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