- 29% of businesses fail because they run out of money.
- 27.5% of small businesses don't even survive the first year.
- The most common reason for failure is the non-acceptance of products in the marketplace.
A quick fact checks before you jump into the hacks. These shocking numbers led me to put together this guide for you.
A new company gobbles up more expenses than an old one. A corporation spends more on infrastructure than a small business or freelancer. A sole proprietor invests comparatively less in inventory than a commercial enterprise.
A business may vary in size, type, industry, and niche. And so does the investment. But the ideology of spending awareness should remain common practice.
Regardless of your company's influence in the industry (size), cost reduction should be a company's top priority. It is important to seize every possible opportunity to reduce additional expenses in the business to improve profit margins.
With such a large number of businesses failing due to cash flow issues. What are your plans to reduce your company's expenses?
Here's Our Insight on Reducing Business Expenses
1. Employ more remote workers
Remote work is one of the most sought-after approaches to reducing business costs. But in this age of COVID19, it's also an approach to protect employees.
45% of employees who work remotely find it more convenient this way. For reasons of general acceptance, it saves time and effort. As a result, it improves concentration. It not only shows that by using remote workers, but you also improve employee satisfaction. You also save a lot on infrastructure costs and effort.
Find out how telecommuting can save you a lot of money:
Savings on rent: On average, an employer saves an additional $10000 per year on each employee by having them work remotely. This includes savings on rent, electricity, infrastructure, and more.
Sanitation services: more employees required more office boys to take care of their needs. Now, with fewer employees, you actually save a lot on costs and salaries.
Food & Coffee: this may be a smaller expense, but these costs are certainly eliminated when your employees work more remotely.
Increased Productivity: when a lot of hassle and effort is saved by eliminating the commute, the efficiency of team members increases. In the last survey, it was reported that the average productivity increases by three times when employees work remotely.
2. Invest in technology
Companies that invest in and take full advantage of technology save a lot of costs on manual processing.
The impressive AI of technologies has automated maximum manual tasks that in the past required you to hire additional labor. Imagine that in the past you employed 5 administrative staff. Now you can easily automate the majority of your workflows, saving you additional costs. Plus, automation reduces errors to the point where they don't even occur.
Listed below are some of the technologies you can leverage to provide cost savings:
Online invoicing and cash flow management: online billing software with AR and AP management is cloud-based software that eliminates the need to create paper invoices and manage sheets in files for receivables and payables. The best online invoicing softwares in the market automate much of the activities that used to require human intervention, such as invoice creation, payment reminders, online payment acceptance, credit/account note management, data management, and creation of filtered reports.
Also look for free process simplification tools like Skype, Google Analytics, and many more to make your tasks easier.
3. Outsource to expert teams
Companies around the globe are opting for outsourcing instead of hiring in-house teams. It saves cost, effort, and time while providing expert guidance and the confidence of getting the best.
4. Optimize spending on paid advertising.
In the age of digitization and change, it's okay to spend more of your marketing budget on advertising. But it's how you optimize the spending that matters. How deliberate you are with your targeting is key to the ROI you will achieve. Paid advertising shouldn't be your only source of traffic acquisition. Because as soon as you stop spending money, you will experience a sudden drop.
Therefore, in order not to drop your ranking, manage carefully:
Search Engine Optimization: track keywords, competitors' activities, invest in on-page and off-page activities to derive more traffic organically. Participate in forums and channels to increase your overall visibility.
Social Media Optimization: currently, more than 3 billion people are on various social media channels. It has become a great platform to improve your presence and engage with your audience. Hire experienced optimizers who have the ideas to derive traffic organically.
5. Monitor your expenses closely
By far the best cost management a business can do is to track, monitor and manage expenses. Analyze every single purchase and investment. This way, you'll be in a better position to cut costs.
Few areas to reduce expenses:
Analyze travel expenses (include them in projects).
Be careful with office supplies
Be rational with promotional gifts
Infrastructure (explore before buying)
Printing
Electricity consumption
Automate expense management with expense management software to keep track of all your big and small expenses. You'll be able to save more profit by keeping up with your spending.
How are Companies Leveraging SharePoint?
how leveraging SharePoint for content management, business automation, business intelligence and much more, read our blog for more info.
While automation is certainly a buzzword for businesses that envision scaling up, RPA (Robotic Process Automation) and BPA (Business Process Automation) do seem to confuse entrepreneurs more often than not.
Differences are not apparent but real, and in fact, robotic process automation companies will help you understand this before you even adopt RPA.
As startups, small and medium businesses as well as enterprises adopt a vision that is increasingly customer-centric, business process automation and robotic process automation companies step forth to provide sounder automation, deeper insights and better stratgizing to customer-centric enterprises.
While hiring the services of an RPA company is a wise decision, the decision applies to only a certain type of your business processes.
Whereas BPM aims to identify and optimize the all the processes that make any business better on the whole, RPA only pertains to the optimization (through software) of those processes which mimic human activities that are repetitive in task and do not require much human discretion.
There processes are labor-intensive, are repeated several times during the day, and are highly transactional.
Wipro's AI-powered business process management (BPM) services offer insights, cognitive BOTs for operational efficiency through hyper-automation, intelligent processes
