Small businesses in America were among the first casualties of the Great Recession. According to U.S. Census Bureau stats, more than three million of them disappeared between early 2008 and 2010, taking about 3 million jobs with them. It is not surprising that small firms would be the most vulnerable group during any economic downturn. But the numbers truly are overwhelming, especially when we consider the fact that small businesses account for 99.7 percent of all employer firms in America. Not to mention that they were responsible for nearly two-thirds of net new jobs since 1993! In other words, small businesses truly are the backbone of the American economy
Risk vs. Reward
More than half a million small businesses open or close their doors each year in the U.S. The failure rate for any new firm is around one-third in the first two years and one-half after five. Most of these businesses founder because they simply cannot repay the debts they owe and increase sales relative to costs at the same time. Controlling expenditures is quite possibly the single most challenging aspect of running a small business. The owner has little to no margin of error, which makes experimentation a luxury he cannot afford. But as all of us know, without risk there is no reward! With that in mind, let us discuss seven simple tips any business owner can employ to increase sales and cut costs in the early days.
1. Always take a hands-on approach
Delegating authority is fine for bosses who run global corporations, but not for small business owners. A boss at a small firm must keep a close eye on vital financial statistics, including cash flow, payroll, and revenues. He/she must know exactly how much the company is making and spending at any given moment.
2. Reduce finance charges
Some small businesses waste hundreds, even thousands of dollars on late fees and unnecessary expenses simply because they ignore our first tip. Owners must always make certain that they pay their bills on time, since it will ensure a predictable payment schedule with no monthly increases in APRs or bank charges.
3. Use less paper
Even small offices throw away hundreds of dollars each year on paper that is discarded shortly after it is used. But in the digital world, there is really no reason to print out non-legal documents, such as notes, memos, and proposals. Simply send them via text message or email and save the office and environment the trouble of disposing of superfluous material.
4. Try new advertising
Most new businesses cannot afford to market their products and/or services using traditional forms of advertising such as television, radio, or print. But that does not mean that they should forego a marketing campaign altogether. The internet makes it easier and cheaper than ever for new businesses to reach prospective customers and clients through social media, SEO, PPC (pay per click), and other inexpensive forms of online advertising.
5. Bring in interns
Even if you can’t pay them, students are often willing to work for free in order to gain valuable business experience and something to put on their resumes. Simply contact local colleges or business trade schools and inquire about possible internships for eager and ambitious students. You can also post internship opportunities on the internet and attract students from outside your local community.
6. Shop for insurance
Rising costs and higher premiums for health and business insurance have made it harder for small firms to stay afloat in an unstable economy. But studies prove that owners can save a bundle if they simply shop around a bit before purchasing an insurance policy. Independent agents are easy enough to find on the internet and will help you locate the lowest rates based on your unique business needs.
7. Hire freelancers
Most small businesses in American have only one or two employees. But no matter how versatile they may be, there is no way one or two people can run a modern business on their own. From time to time, they will need specialists who can complete specific tasks such as writing, graphic design, information technology, web design, and accounting. But hiring professionals to work full time for part-time positions is obviously a waste of money. Freelancers can help you complete necessary tasks for a fraction of the price of full-time employees.