In todays unhealthy economy, one cant help but wonder how small businesses can effectively achieve cash management. In fact, even medium scale and large scale business are struggling to cut back on their expenditure during the current economic situation.
Everyone is tightening their belts, both customers and consumers. Imagine the consequences if no one wanted to purchase goods other than the essentials. What will happen to the restaurant industry? What will happen to the retail industry, particularly those marketing electronics and those gadgets that people can manage without? Its not just a matter of reducing expenses. Small businesses need to survive and compete with the lower prices that are offered by their competitors, and good cash management is a must.
Here are some tips to help you to save money and manage your business and cash flow. These will also help individuals to better manage their home expenses.
1 Energy Consumption
Electricity is an expense we cant avoid, but if you are able to keep your energy consumption lower than normal, you can save a fair amount of money. One way to save energy is through the use of laptop computers. Sure, they can be more expensive than desktop computers, but imagine the great savings youll get when it comes to energy consumption. A laptop or notebook computer consumes around 90 percent less energy than desktop computers. Most small businesses use computers, and if these are replaced with laptops when the time comes, energy expenditure will be less. The more computers your business uses, the more money you will save.
2. Telephone Costs
The telephone is essential to all small businesses, and many use mobiles as well as land lines. Check up on your monthly plan and negotiate a better deal. As competition is increasing, many businesses are stuck on a deal they started off with, and if they renegotiate they can save a lot of money. Use mobiles only where necessary since they are significantly more expensive to use than land lines. Good cash management involves keeping a close eye on communications costs, especially those that are non-essential.
If you use multiple telephone lines in your business, consider VoIP as an alternative. This can allow you to make huge savings, particularly if you have more than one location for your business. Skype offers a completely free service between Skype users, and it is less expensive than normal to phone non-Skype users.
3 Save on Your Ink
Ink for printers can be another expensive item, particularly when calculated over a year. Try to go paperless and print only what is essential. Use recycled cartridges or buy in bulk to save money. Printer sharing on a network can save on the cost of the hardware and also on ink!
4. Save on Lighting
Most people turn off the lights in their homes when they leave the room, but strangely they rarely do so at work. Make a point of doing so. Switching to energy-efficient light bulbs can save a lot of money over a year.
5 Use the Internet
Small businesses should use the internet as much as possible. It is amazing how many tasks can be carried out online, including business calls, sales calls, online business conferencing, video conferencing, live meetings, instant messaging, seminars and so on.
Owning a small business involves almost constant communication with customers, suppliers and other employees. This can be expensive, particularly if it involves travel. It is just as easy to communicate online as by telephone, and video conference is cheaper than a transatlantic flight! Online seminars can be arranged for training purposes, and advertising costs can be slashed through online advertising. Websites are becoming easier and cheaper to put up with every day that passes. The internet offers many opportunities for you to improve your cash management and improve your overall cash flow.
6. Assess your Office Space
Perhaps you have too much office space and you can afford to let some of it out until you have expanded enough to need it. If you are renting, share the rent with another small business that only needs a desk or two.
7. Bulk Buying
A lot depends on your cash flow situation, but it is sometimes cheaper to purchase office items on a quarterly rather than a weekly or monthly basis. This is particularly true if bulk discounts overcome the problem of tying up your capital in stock. You will save on delivery charges, but make sure that you budget the use of such supplies, since there is sometimes a temptation to use more materials or supplies when stocks are higher than normal.
Although times might seem bad, those with the ability and desire to make savings will come through in a much stronger position than small business owners who do nothing. Dont let that be you, and by following these seven cash management tips for small businesses, you should be able to make significant savings.
