Being a frugal business owner is absolutely key if you want to make sure you start a business that lasts, rather than one that runs out of cash after a short time. Learning how to manage money is one of the most important things any budding business owner can do. Frugal business owners tend to share many of the same
1. They Don’t Hire, They Outsource
Hiring people to work for you is sometimes a necessity if you need another pair of eyes/hands, however, there are other options. After all, when you hire somebody, you have a duty to pay them and take care of their wellbeing when working for you whether you’re making any money or not. Essentially, you have another mouth to feed. This is why many frugal business owners turn to outsourcing instead. Outsourcing is an extremely effective way of getting the help you need, because you don’t have any commitment to the person you hire to help you. You can outsource a virtual assistant indefinitely, or you could even outsource somebody for a one off job depending on what you need.
2. They Use Social Media For Marketing
Social media for marketing is one of the most effective tools their is, and the great thing about it is that it is free. You can pay for social media advertisements too, and they can be cost effective and worthwhile. Although you should have standard marketing materials, such as a great website, make sure you also put a focus on free social media accounts and use them to connect with your audience and build relationships. This way, you can stay in the forefront of your audience’s mind without spending a penny.
3. They Stay At Home For As Long As Possible
If you have a small enough business, staying at home for as long as possible will allow you to save a substantial amount of money on overheads. Moving out of your home means renting somewhere to work, purchasing equipment, paying utility bills, and potentially having a host of other bills to pay, too. If you can create an office at your home address, you’ll be saving a whole lot of cash. But what if you want to appear more professional? No problem – you can buy professional looking addresses and phone numbers without moving at all!
4. They Develop Great Relationships With Suppliers
Developing a fantastic relationship with your supplier could mean getting a better deal with them over time. Prove you’re a valuable customer and that you’ll be purchasing from them in the long run and they might offer you a great deal.
If you’re taking the time to browse VarnerPipe.com or a similar supply site and wondering if there’s anything you can do to reduce the expense, make sure you contact the team and ask. However, many business owners choose to wait after ordering a few times before trying to negotiate.
5. They Negotiate
Following on from the last point, if you can negotiate, then do. You might be able to negotiate on second hand furniture and equipment for your office space, for instance. There are usually numerous things you can negotiate on and therefore save money.
6. They Expand Slowly
Many small business owners want to expand quickly, and then learn that their finances can’t handle it – at this point, it’s already too late! You should grow strategically to ensure that you can keep up with things financially. There’s no need to rush.
7. They Come From A Place of Abundance Rather Than A Place Of Lack
When you come from a place of abundance rather than a place of lack, you don’t feel the need to spend money on things you don’t need. Entrepreneurs that are coming from a place of abundance also embrace competition and are optimistic, knowing that there’s room in the industry for them. This can take a little work on your ‘money mindset’, but it’s definitely worth it.
8. They Reinvest In The Business
Frugal business owners know that reinvesting in the business is key to growth. Taking the money you earn and spending it on things that don’t help the business isn’t a good idea, especially not when you’re just starting out.
9. They Have An Emergency Fund
Having an emergency fund in place can stop you from experiencing debt related issues in the future. For instance, you want to make sure you can afford to support yourself if business slows down or stops completely, so having a few months living expenses saved is important. Then, an emergency fund for business related emergencies will allow you to do things like repair a piece of equipment that unexpectedly breaks. Business credit cards are an option, but not ideal if your income isn’t steady.
10. They Implement Effective Invoicing Strategies
Making money in your business is fantastic, but it isn’t the be all and end all. Why? Because cash flow can actually be the most important thing to focus on. If you don’t have a steady stream of cash coming in, it can be difficult to manage your finances and ensure you can keep going no matter what. By implementing effective invoicing strategies, you can make sure you get paid correctly and on time. If your invoice isn’t paid within the first 48 hours, chances are, this person is going to make a late payment, or not pay you at all. Knowing how and when to invoice for the best results is a must. Have effective reminders in place so that your clients can’t forget that they owe you!
Above are the behaviours that frugal business owners tend to share. Do you have any of these traits, or will you adopt them? Let us know!
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