By Jonathan Kettle, Founder and Director of Taxicode
Most SMEs and start-ups will agree that spare money is rarely in abundance. It can create a difficult situation for businesses, not wanting to reduce their quality or service, but needing to keep outgoing finances to a minimum in order to continue operating and growing comfortably, and to help the business compete successfully with rival companies of all sizes – However there’s no reason why a small company shouldn’t be able to compete with a multinational, just because they’re keeping costs low whilst their rival is dividing up the shares in order to gain investment. There are plenty of options for businesses to stretch the pounds whilst still remaining relevant and competitive in the marketplace.
You’ve got to spend money to make money
It’s a cliché, but it is so often true. A well placed investment in your early days can result in easier and greater revenue later on. You may not think of it as saving money or cutting costs, but you have to look at playing the long game – for example, paying for promotion or a useful technology or service at the start of your venture may mean an easier route to the top, rather than struggling and forking out more across a longer period when you need it later on. By looking out for the right opportunities at the right time, you can make pounds stretch further.
Assert your position in the market
Are you the first to market? If not, what makes you different? Why should anyone care? If people see you as “just another” company, competing alongside your rivals with little to differentiate you, the battle is going to be a lot harder. If you’re the first to market, getting the news out there as soon as possible will mean you get as much of the attention as possible, rather than your late-to-the-party competitors. Either way, people need to know what makes you better than everyone else.
Cheaper doesn’t mean worse
It’s more than likely that you’ll have to work with people and businesses outside of your own, so it’s important to do your research into the services they offer, alongside the prices they charge. A more expensive connection may provide more services, but do you really need all the extras? Don’t fall for sales tactics.
Location, location, location
For many businesses, but especially those with an online focus, there is little reason to be based in an expensive area like Canary Wharf. Operating out of a small office just outside of a major city can allow you to cut your overheads down, whilst enabling a short trip into the city for any meetings. As well as this, there is no need to pay for an office that is bigger than your business needs.
Some business managers may believe that a city centre location makes the company appear more professional, but considering the amount of successful businesses based outside of the major cities these days, this way of thinking is not necessarily correct.
Get the right fit with your workforce
There’s no reason to hire more employees than you really need. As long as your business can operate comfortably and to a high, competitive standard, without putting excessive strain on your team members, you shouldn’t need anyone else. Obviously if/when it comes to a point where your business has seen growth and is becoming successful, it makes sense to introduce new employees due to increased workload and expansion, but don’t get overeager to expand your team without being able to justify the expense.
Careful recruitment is also valuable in this instance, as it might take two lower paid, lower skilled employees to fill a position that could be covered by one slightly higher paid, talented employee.
Businesses can also make use of peak periods to fluctuate their employee numbers, such as hiring temporary staff during a time when there is greater demand, or a large contract has been acquired. As well as this, don’t feel that you have to hire an employee on a full time contract, with full time pay, if you don’t need them there full time.
Keep your employees happy and hold on to them as much as you can. Employee turnover can be costly both in time and finances.
Take control of your bills
There is absolutely no need to unnecessarily heat the building, especially over weekends and during nights if no one is there – you may as well just be burning money! Taking greater care of computer hardware and supplies can also help reduce costs a large amount, radically reducing the frequency of repairs and replacements. If it’s possible for your business, go paperless – just question if you really need to be printing out that memo next time.
Keep your customers happy
It may sound simple, but keep your customers happy and you will find it much easier, and cheaper, to promote the business. Make your customers work for you! Many businesses can rely quite happily on repeat trade whilst still proving profitable, all through keeping their customers satisfied and wanting more, whilst other SMEs and start-ups can get enough new custom from word-of-mouth to sustain their growth.
Get the most out of the internet
Social media is such a useful tool to connect you to your customers, and on a base level it’s completely free. Use it properly and you can create new marketing opportunities for yourself through a pre-existing network of potential customers.
Social media also gives the public a platform to say whatever they like about your company, whether that be a comment, complaint or just a troll – it’s how you decide to respond to these that can ultimately result in greater customer satisfaction, and greater promotion and respect for your business.
Many start-ups and small businesses launching new products make use of crowdsourcing services such as Kickstarter and GoFundMe, and your company will not be alone if you take this approach – However, every so often a popular product or service emerges through crowdsourcing which gets picked up in a big way, and these business receive a decent amount of backing, as well as potentially more promotion across the internet. The most successful crowdfunding projects often go hand in hand with a good social media campaign, so set out a clear plan of action across all of your available resources and you could find your business really changing for the better.
Jonathan Kettle
About the Author
Jonathan Kettle is a serial entrepreneur and the founder of successful online taxi-booking business TaxiCode.com. He is also the founder of TaxiPriceCompare.co.uk and a co-director of Web3 Resource Ltd.