A steady job may be more lucrative, but it lacks the thrills you get from a business. After all, you are your boss. But it doesn’t mean that becoming a businessman is an easy road. If you think so, you are wrong! He has to make critical decisions, look after the overall operations, manage finances, and whatnot! But many business owners find it troublesome to save money. Are you one of them? If yes, worry not. Here, you will get to know about the best money-saving hacks if you are self-employed.
So, what are you waiting for? Let’s start.
Table of Contents
- Money-Saving Hacks for Your Business
- Manage Your Expenses
- Collect Debt Efficiently
- Go Online
- Outsource the Non-Core Activities
- Diversify Your Income
- Key Takeaways
Money-Saving Hacks for Your Busines
Saving money is no rocket science. You can do it too with proper planning. Here are the top 5 money-saving hacks for your business.
1.Manage Your Expenses
A business can earn more profits by increasing revenue or by reducing expenses. Increasing revenue by charging higher prices is not an option in this competitive world. So, managing and minimizing your expenditure is the only alternative available to you.
For managing your expenses, the 50/30/20 rule can be very beneficial to you. It states to spend at most 50% and 30% of your income on necessities and wants sequentially. But make sure to save at least 20% of your income. Merely saving your money won’t solve your problem. Thanks to the inevitable evil called inflation. So, try to invest the savings as well.
Making a budget is an effective way to manage expenses. But it is possible only when you have complete knowledge about the various expenditure. Don’t worry. With Virtual Accounts, you can get real-time information about your cash flows. So, it acts as a pocket-friendly money manager.
2. Collect Debt Efficiently
Due to the cut-throat competition, people have no choice but to offer credit to their customers. But it increases their working capital. So, it is necessary to collect debt efficiently. Else, your financial requirements will shoot up alarmingly.
To ensure timely collection, you can do the following:
- Create a written agreement stating the terms and conditions
- Collect advance payments
- Charge a late fee
- Simplify the payment method
- Send payment reminders
You can do the first with the help of a legal consultant. And you don’t have to scratch your head with the rest either. With the use of Payment Links, you can accept payments without a website. You can even send payment reminders to your customers. What’s more, you can even track payments to know the status of each client.
3. Go Online
Gone are the days when you have to meet with clients to close the deal. Now, we are living in the digital era. So, it is only natural to take your business online as well. It will have many benefits.
First of all, you don’t get restricted to your city. You can transact with global clients also. And your business is flexible. So, you can do it as per your availability. Also, the transaction gets settled in real-time. So, going online helps in managing funds efficiently.
The best benefit will be the substantial cost reduction. You don’t have to pay the rent of the business premises, as you can do the business while sitting at your home. Also, the transaction costs are way cheaper than an offline business.
Not only you, but the customers will benefit as well. They can transact conveniently and gets a wide variety of products at affordable prices.
4. Outsourcing the Non-Core Activities
Remember the golden words of Peter Drucker “Do what you do best and outsource the rest.” Indeed, you can’t be a one-man army. Instead of becoming a jack of all trades, become the master of one. And let your team handle the rest.
It will help you to save your valuable time and operational costs. Besides it, you can reap the benefits that arise due to the expertise of people. As you won’t worry yourself with petty things, you can focus on your business well. It leads to the massive growth of the entity, provided you take the vital decisions after proper research.
Besides the above, you can be flexible while outsourcing the work. So, you don’t have to worry about the fixed salaries and the employee benefit expenses of the permanent employees. It helps in reducing the overall risk in the business.
5. Diversify Your Income
No doubt, you should focus on your business, as you put in all your sweat and blood to make it a reality. But don’t become over-possessive about it.
Remember the previous year? How could you forget anyways? A microscopic virus brought suffering to the entire world. There were massive job losses and shutting down of business. If your business was able to endure it, you should pat yourself on the back.
Don’t get us wrong. But what if such a disaster comes again in the future? After all, history repeats itself. Then what will you do? So, it is essential to have more than one source of income. In case something undesirable happens, you won’t face much trouble.
That is why you should create a passive income source besides your business. For example, you can invest in real estate and earn rent and capital appreciation. You can also monetize your skills by working on gigs.
But the best way to do so is by investing your money. It will help you obtain the power of the 8th wonder of the world, i.e., compounding. So, don’t forget to diversify your income. As it is rightly said, “Don’t put all of your eggs in one basket.” Start investing in a mutual fund, stocks and other investment instruments through platforms like Paytm Money, and Groww.
Starting your business is not a bed of roses. You may have to work 24*7 as well. One of the vital problems is financial management.
To save money, you should manage your expenses by creating a budget and implementing it as well. Collect debt efficiently to operate your business without much capital. If you are not able to do so, your business will suffer heavily. You can go online and outsource the external activities to reduce costs significantly. Although operating the business is your top priority, don’t forget to diversify your income.
In the end, remember that a penny saved is a penny earned. So, don’t forget to save money to the fullest.