Executive Summary – Small businesses need to be run as efficiently as possible as they have to face the risks of a small scale organization. Using technology, measuring KPIs on a regular basis, smart resource hiring, having an online presence and reducing expenses will help the business to function efficiently.
Use Technology Efficiently – Technology enables a business to do many things at a fraction of cost as compared to earlier times. We can connect with clients, conduct meetings, share documents using web applications like Skype instead of phone calls and face to face meetings (especially if the client is far away). There are many applications to conduct business which are either free or cost effective. For example, Evernote can be used to manage to-do lists, make simple project plans and organize a lot of small paperwork. If you use the paid versions, there are interesting features like converting your notes to a presentation. You can use SurveyMonkey for feedback. The basic plan is free. With the paid versions, you can customize the logos and colours, export data and do some analysis. Wave Accounting is a free cloud based accounting tool for very small businesses. You can have paid packages for support etc. Facebook and Wordpress can be effectively used for marketing purposes.
Measure KPIs – You should know how successful your business is. You should list out certain key performance parameters and then measure them periodically. For example, you should measure cost of inventory, cost of labour and utilities bills. You should compare the cost in different periods. You should compare them against revenue. You should check revenue earned and profit margins on a quarterly basis. You should then take action to being in improvements or rectify faults. Measuring KPIs help you know how efficient your business is and help in decision making.
Your business should be online – Today the potential customer is online. You have to target him there. You should have a digital marketing strategy which will get you visibility, publicity and customers. You should engage with your customers online on social media or you might lose him to competition. You can give interesting offers on deal sites and online shopping places. In lesser costs, you will be able to reach out to a wider audience and in today's digital world, online presence for a business is a must.
Reduce Expenses – There are various avenues to reduce expenses. Instead of travelling to clients' offices, you can use Skype and VOIP phone calls. You should check the credit cards you use and discontinue the ones that have high fees or are not used much. You should schedule alerts for due dates on bills so that you don't miss payments leading to charges.You should try to reduce electricity expenses by prudent consumption and using energy efficient lighting mechanisms. You should try to recycle and reuse as much material as possible.
Running a small business efficiently using the above tips will help you to cut costs and increase profitability.