Running a business is always a challenge without the added pressure of a global pandemic. 2020 was one of the toughest years for business owners, both financially and logistically. With a shortage of workers and supplies prices have continued to skyrocket and the combination of reduced revenue and complications caused by the coronavirus, outbreak have left many businesses struggling to make ends meet. If this feels all too familiar then you need to hear these 5 tips to help you stretch a tight budget.
1. Hire Remote Freelancers
One of the most expensive costs for a business is undoubtedly staffing. Paying taxes, pensions, national insurance and sick pay all eat into your revenue. If you also factor in the cost of hiring a building large enough to house your employees, you will very quickly realise where a lot of your money is going and will explain why your staffing budget is so stretched.
While you will almost always need some on-site staff, you can save a lot of money by hiring freelancers as and when you need them rather than keeping on a member of staff that may not be needed all the time. Freelancers are responsible for their own taxes and you may be able to hire someone in another country where the currency conversion rate is in your favour, so this takes even more pressure off of your staffing budget.
There are several platforms you can use to source freelancers – and they generally have their own profiles where you can check out their portfolio and also the feedback that has been left for them by previous clients. This gives you peace of mind that the freelancer you’ve hired is going to be the right person for the job.
2. Check How You’re Paying Suppliers
If you’re considering hiring remote workers or international suppliers, one of the easiest ways to make your budget stretch further is by researching the most cost effective way to make international payments. Most companies use bank transfers to pay suppliers, regardless of where in the world they’re based.
However, by switching to using an international money transfer service you could save money on fees that the supplier will expect you to cover. According to MoneyTransfers.com Most banks charge a percentage transfer fee, whereas money transfer services often charge a flat fee which makes it cheaper to transfer and puts a little extra cashback in your budget!
This year has seen a sharp rise in the number of people that now work for companies remotely – great news for your business because it means that you can hire the best people regardless of location. If you have hired team members that work abroad then it is essential you consider how you’re going to pay their salary.
You could save a lot of money if you spend some time finding the best ways to send money abroad. A bank transfer or BACS payment like you may do for your UK staff could cost you money in fees, which is something that you’ll want to avoid especially if you’re on a tight budget.
3. Reevaluate your Toolkit
It’s understandable that, as a business, you’re likely to be paying for several different pieces of software. Things like social media schedulers, group cloud storage, accountancy software and a company email programme all mount up.
Most business-focused software carries a monthly subscription cost so one very quick and effective way to reduce your spend is to look at the subscriptions you currently have and cull any that you don’t need. If there are pieces of software that you need then look to see if there are any cheaper alternatives on the market – just remember to take into account the time it takes to train staff members on new software.
4. Calculate ROI on Your Expenses
Along the same lines as looking at your toolkit, now would be a good time to audit your other large expenses. Look at how much you are spending and calculate how much value you are getting from these expenses – that could be financial returns or non-monetary value such as brand awareness.
If there are any large expenses that aren’t providing a great return on investment then consider reducing your expenditure in this area of the business. You could do this by cutting out the expense entirely if it’s not something that you consider to be essential or you could spend some time researching to find a more affordable alternative.
5. Re-evaluate your Advertising Spend
Often one of the largest sources of outgoings in a business is marketing. Paying newspapers, TV channels or radio stations to advertise your business is expensive and doesn’t always provide as much value as you think. While these advertising channels might work well for you, now is a good time to explore less costly marketing options.
Social media marketing is often much more affordable than traditional advertising and can be more effective if you know how to properly target your audience. Take some time to really define who your customer is and then input this when setting up an advert to ensure that you’re targeting exactly the kind of person who you would want as your customer.
This doesn’t mean that you need to cut back on your advertising budget, although that is possible if your budget dictates it. Instead, you could look at how you can spend your advertising budget more wisely and reach a larger target audience with the same advertising budget.
2020 has been one of the most challenging years for business owners in recent memory, regardless of what industry you are part of. However, if you’ve made it this far you’ve already survived the worst of the storm and now is your opportunity to reevaluate the current health of your company and take steps to adjust and innovate to the new normal world.
With a huge rise in the number of freelancers and popularity of remote working it’s easy to reduce your staffing costs. Additionally, new forms of media and the competitive market of business software will really help you to reduce expenditure and get the most out of your budget.