Being financially unfocused, wasting money, and making poor investment decisions, are all cardinal sins in the world of business — and are guaranteed to ruin your prospects as an entrepreneur, or the founder of a new startup.
Of course, if you are an entrepreneur, or the founder of a startup, it’s not simply a matter of making enough money to turn a profit and keep your businesses operations ticking along smoothly. There’s the added dimension to consider of even just being able to allocate resources effectively enough to ensure your business has a shot at becoming a genuine entity in the industry at large which is why you might need some tips for saving money.
For all of those reasons, and for others, too, it’s essential to identify and apply effective strategies for saving money in your professional life.
Here are a few tips for saving money in your business.
Focus on core services, don’t get too caught up in all the extras
One thing that just about all seasoned and successful business veterans do well, and that a huge proportion of all new entrepreneurs do poorly, is to determine just what the most essential components of any job are, and then to focus almost exclusively on those.
To paraphrase Warren Buffett, the difference between successful and very successful people, is that very successful people “say no to almost everything.”
Many entrepreneurs, on the other hand, fall into the trap of trying to do absolutely everything conceivable to give their business a fighting edge. They read dozens of books on just what it takes to make an entrepreneurial venture successful, store away snippets from hundreds of articles, and throw themselves into tackling a virtually unlimited number of different projects.
It’s not uncommon for a solo entrepreneur to be simultaneously working on:
Creating a white paper to boost mailing list sign-ups, running a blog with daily updates, doing a website graphical redesign, rolling out a new product, offering three or four different core services to clients, undertaking an aggressive cold-emailing marketing campaign, trying to organise collaborations with different members of the industry, working to get a YouTube channel up and running, handling day-to-day admin tasks, and so on.
The thing is, all of us have the same number of hours in a given day, and no more. If you think that the world’s most successful business magnates are dividing their attention in so many different directions that each project gets about 15-minutes a day of focused attention, you’re quite wrong.
Of course, scattering your focus too broadly doesn’t just waste your time. It wastes your financial resources too, and limits future earnings, as well.
To save money, and time, focus on your “One Thing”, or “core competencies”. Leave all of the extras aside for now, or delegate them, or phase them in later.
If you need to borrow money, look for transparent deals
Predatory lending schemes are, unfortunately, notorious, and many people find themselves signing up for both personal and professional loans which end up ruining them thanks to hidden or opaque terms, interest rates, and fees.
Nonetheless, businesses borrow money — that’s a simple fact of life, and is, in many cases, unavoidable.
In order to prevent yourself from falling prey to financial predation, or even just signing up to deals where the trade-offs aren’t worth it, and financial loss is a real risk, you need to look for transparent lending deals.
Recently, in the UK, for example, business cash advance programs are increasingly popular in business circles, as they present clear terms, don’t depend on predatory interest rates, and involve repayment through selective channels only — such as by taking a certain percentage from card transactions.
Measure twice, cut once
An old craftsman’s proverb says that we should “measure twice and cut once”, and the moral of this lesson is very relevant to business, and particularly to issues surrounding proper financial management and the reduction of waste.
The basic idea behind this proverb is that you should view yourself as a craftsman working with some valuable resource. Maybe you’re a leatherworker, working with an expensive piece of leather, or a carpenter working with an antique piece of oak.
Clearly, you don’t want — and maybe can’t afford — to be careless and allow your material to become damaged. Therefore, you take careful measurements of what you plan to do, first, and only once you’ve run those measurements through twice, you “cut”, or take action.
If this idea applies to traditional crafts, it certainly applies to business as well. Are you just throwing money around to try and see what pays off? Don’t do that. Instead, apply strategy wherever possible, and measure things carefully.
If you’re running a PPC campaign, don’t just drop the maximum conceivable amount of money on the campaign and see what happens. Start with a low amount, track the effects, and increase systematically until you locate the sweet spot where the financial trade-off is most justified by the return on investment.