I should start by clearing the confusion, just in case you are wondering. Being cheap and being frugal are two entirely different things. The first is just plain silly if you are trying to run a business, but the later is being smart when applied in the same context.
Starting and growing a business can be a very stressful period in the life of an entrepreneur. Among the key things that he/she has to worry about are payroll, insurance, spreading the word (marketing) while also seeking to make and keep employees satisfied. Add the burden of proper financial management to that list and the burden seems almost too much for anyone to bear.
Money management is one of the factors that is key in launching a business that has a solid foundation. Being unnecessarily tight fisted when it comes to money will almost certainly drive your business into the ground. On the flip side, being unnecessarily generous with spending has not helped anyone either. This are the two extremes of money management that should always be avoided.
Every smart entrepreneur knows that the answer lies in striking a balance somewhere in the middle - the sweet spot if you can call it that. That balance is what I call 'being frugal'.
So if you own a business or you are about to start one, here are a few tips that will ensure you tow the line of entrepreneurial success without burning a hole through your money bag.
1. Take advantage of free advice
Every person knows - or should know - the value of advice, especially in the business world. This becomes even more evident if you are running your business on a very tight budget and cannot allocate money to pay for consultation on matters such as legal, accounting and other major business issues.
This is the time when you capitalize on all the contacts you have made in your business journey. By this, I mean your mentors and advisors; people who you look up to that have been in business longer than you. Another vital resource would be your network of entrepreneurs, perhaps in a mastermind group or any other kind of group.
These people want to see you succeed in business and so will most likely give you professional, actionable advice that you can capitalize on to grow your business.
The best part is that these invaluable pieces of advice are free.
2. Use coupons for purchases whenever possible
Here is a fun fact: American households with average earnings of $100,000 and above use coupons for purchases more than families making $35,000 and below.
Purchasing with coupons is a smart business move that will save your business tons of money, especially when you use it to buy stuff that you normally would not be able to afford because of its original value.
You can find coupons online for almost anything, from accessories to culinary masterpieces and everything in between. Also, you can find reputable coupon dealers all over the globe such as from coupons.com in the US to promocodeclub.com in India.
So no matter your location and your major trade currency, utilizing coupons for your business purchases will not be a problem.
3. Use distributors, Reps and affiliate partners
This strategy of marketing your goods and/or services is widely used by many industries. You can have distributors, representatives of manufacturers and affiliate partners who will market and distribute your products to their customer base via their own distribution channels.
The advantage of this method is that it helps you to thin down your marketing budget and grow sales faster. It also ensures that you always make money because you do not pay these partners until your products are sold, which means you only sign payouts from your profits; no loss incurred.
4. Outsource occasional jobs
In every company, there are certain tasks that are not part of its day-to-day activities. It is not a financially wise move to have someone on full time salary for such jobs.
The outsourcing industry is a multi-billion dollar industry and is extremely diverse in the range of services offers. Outsource jobs that you cannot afford to have a fulltime salary staff for and save more money doing so. Outsourcing runs on a pay as you work system; this is good because it means you only have to pay for the service when you need it.
5. Buy efficiency, not aesthetics or luxury
You do not have to buy the best of everything for your business; always go for efficiency and effectiveness over aesthetics or luxury.
Say, for instance that you are shopping for some PCs for your office and your business is one that manages a small size database of customers and partners. It will be silly to go purchase the latest in PC technology when a few, simple, non-sophisticated PCs will do the trick. Luxury does not grow a business, productivity does. You are not buying office equipment to flaunt it; you are buying it to use it.
So take your time to study equipment you want to buy and read reviews about them. This will help you pick the best and most effective piece of equipment for your office that is every bit your money's worth.