Guest Post written by Jake Moreno
Owning a small business is a difficult but definitely worthwhile adventure. Of course, the road to small business ownership isn’t an easy one, and it is full of challenges and learning opportunities, but almost everybody who starts a small business will agree that all of their efforts are worth it—even if the business doesn’t work out.
Unfortunately, small businesses not working out is a common thing: 20% of small businesses fail within the first year of opening, 30% in their second year, 50% within five years, and a whopping 70% of small businesses don’t make it to ten years.
While the exact cause of the failure depends on the business and the specific situation, the fact remains that it is definitely hard to run a small business. And when it comes down to it, there is only one thing that makes the difference between a small business that succeeds and one that fails: how much money it makes.
Obviously, every business depends on making money, but in the world of small business, it can be much more challenging to generate a profit, which is why small business owners need to worry about it constantly. When you’re running a small business, every penny counts—especially if it is your only source of income.
And as any business-savvy person will likely attest, the best way to earn a penny is to save a penny. So, in an effort to help you and your small business succeed, here are a few easy ways to cut small business costs.
It might seem counter-intuitive, but hiring an employee or even a third-party company to handle things like bookkeeping, tax filing, data entry, and other mundane tasks will enable you to focus on other things that are more important for your business. When you invest in your own time, you enable yourself to make up for the money you spend on those services by helping your company generate a bigger profit. It’s the classic tale of spending $1 to make $10. That’s a sound investment!
Rent a Storage Unit
This might sound odd, but in some situations, renting a storage unit can be the most affordable option for your business. It offers a variety of benefits, including minimizing work space clutter, lowering your travel costs, and keeping your overhead costs to a minimum. In some cases, companies have even started inside of storage units—it’s much cheaper than paying rent, after all! In any case, renting a storage unit is another one of those things that might be expensive, but can pay itself off in more ways than one. While it might not be the best choice for every business, it’s definitely an option worth considering.
Increase Your Security
A lot of the unexpected costs that small businesses face have to do with criminal activity. From vandalism to theft, criminal acts can be incredibly costly, sometimes costly enough to put a business under. However, investing in a security system is an excellent way to prevent such crimes or at least deal with them appropriately after they happen. A good security system will protect your investments, reduce crime, and potentially save you quite a bit of money in the end.
Know When to Call It Quits
Unfortunately, as mentioned above, a lot of small businesses do fail. When handled correctly, even a failed business can generate a profit and provide valuable experience for the future. When handled incorrectly, a failing small business can land its owners in a considerable amount of debt. Don’t let that happen to you! Knowing when to call it quits and handle the closure of your business in an appropriate way will be much more valuable to you than any sense of pride or commitment that convinces you to keep your business open longer than you should.
Talk to a Professional
The best way to get better at something is to talk to an expert. Almost every small business owner is happy to share anything and everything they have learned with anybody who will listen. If you are thinking about starting a small business or already have one and would like to learn a thing or two about how to run it better, find a business you admire and see if you can talk to the owner and/or operator for a bit.
Come prepared with a few specific questions that you have and be ready to actually take any advice that you might receive.