Having a detailed and realistic business plan in place early is vital.
The critical point is to refer back to them from time to time to make sure you're on track or adjust them where necessary.
It's straightforward once you have taken the difficult step of setting up your business to crack on with things, forgetting about the plan.
But it's that plan that will give you clarity in the future and make it easy to manage your costs and growth plan.
This is one of the best ways for a small business to save money because referring back to that plan; you might realise that you're spending a lot more than you'd planned to on a specific area.
Plan, review and plan again. That's the best way to keep your costs under control.
Leading on from that, aside from small costs creeping up, it can also be a great idea to cut some costs altogether.
It's well known that cost-savvy managers keep their eye on the little things that add up, rather than just the big things like rent and electricity.
Free croissants at the BBC were famously cut when Greg Dyke began a purge on unnecessary expenditure. The result? A saving £20 million!
It’s no wonder that closely examining expenditure is the priority when trying to grow small businesses.
Tiny elements of the business may not be missed at all, so removing them completely can save a surprising amount of cash without impacting the company's running.
Do a few quick sums to see how much you're spending per year on the necessities and think about which ones you can cancel altogether.
It’s tempting to buy cheap when investing in technology for your business, but this is a common mistake made by business owners up and down the country.
We're not saying you should buy the most expensive thing on the market - that would also be a mistake.
The key is to look not at the cost but the value to your business.
How many hours per month will this piece of equipment save me?
How much can we charge our customers if we introduce this new service?
How many more customers will this new equipment allow us to serve?
You need to answer questions like these instead of just "How much does it cost?"
Investing money wisely in the short term can significantly affect your turnover and profitability in a long time, so don't fall into the trap of thinking that you should buy cheap or buy the most expensive; think instead about the value to your business.
A business can have great products/services and brilliant staff, but cash flow is essential for survival and growth.
Inaccurate recording of all incoming and outgoing costs can cause oversight, so cash flow problems can seemingly appear from nowhere.
Banks are particularly keen to identify any cash flow issues when deciding whether or not to lend, as it can truly make or break a small business.
Work with an accountant to establish whether your business is at risk from cash flow problems or not.
Improving cash flow can seem challenging, but problems tend to come from poor payment discipline for small businesses.
Establishing a sound collection system and being firm with suppliers and customers who are difficult helps to identify and resolve disputes quickly.
Encouraging quick payment can range from offering discounts for early payers to requiring credit cheques on all new noncash customers.
It can be a tough decision, but often, unnecessary staff cause a considerable loss of money.
Think very carefully about the benefit and necessity of hiring new people and the efficiency of current staff members.
It may be possible to avoid letting people go by investing in training and improving their productivity or finding out if there are reasons why they’re not working to maximum efficiency.
Many small business entrepreneurs get frustrated when trying to promote their business in an increasingly crowded market. The temptation to invest in an expensive marketing campaign can be substantial.
However, there are certain things you can do for little to no cost that will seriously improve the way you market your business.
Social media, for example, means businesses can gain massive amounts of PR locally for virtually nothing.
Think of running competitions where you offer people the chance to win a reward.
Small campaigns like this can be a great way to gain free traction online.
Many businesses put plenty of effort into winning new customers while forgetting those that keep the company going.
The little old lady that spends a small amount with you every week is just as valuable as the one-off customer who spends a hefty sum after being attracted by a deal.
Maintaining excellent customer service and being seen as reliable and trustworthy is one of the biggest.
Customer loyalty and brand reputation will also help you recruit new customers without raising costs and ensure consistent cash flow.
Something once regarded as a luxury for companies is now accessible to more people. Small businesses can access green tech and energy deals, making sustainability a sassy business move.
Investing in solar panels, switching energy suppliers, or even reusing things rather than throwing them can help save costs and generate new profit.
Small businesses should always look for new ways to market their product or adapt their strategies to identify areas where they could grow.
Many businesses may not realise the cash they’re losing out on by excluding specific demographics or having money tied up in products that don’t sell as well as predicted.
Money can be saved by only making small and gradual changes and easing growth sustainably.
Think about trends and freebies you can entice people in and cross-sell opportunities to increase profits incrementally.
Thanks for reading. If you want your business to thrive and grow, continuous improvement is necessary to ensure you don’t get a nasty surprise during a slow period.
Interested in finding out how much you could borrow? Click below to fill out our no-obligation form.
