A Little Savings Go A Long Way For Small Businesses
Every business has no shortage of business problems. However, the type of woes that small businesses face are relatively different from their larger counterparts.
For small businesses, the majority of these problems are due to revenue and cash flow. This is largely due to the diminutive nature of their business, making them unable to enjoy the same financial advantages as large companies.
The last thing that every small business owner will want is to be riddled with cash flow issues. It does not help a small business if the profits earned are unable to fund employees’ payroll or if the cash-on-hand is dipping into the negatives on the balance sheet.
Related reading: 4 tips for saving time on small business administration
Similar to personal savings, every small business should protect their liquidity by ensuring that they have sufficient buffers of cash. The way to go about is to save.
Here are some ways in which a small business can save without compromising on operations.
Purchase Secondhand Items
This applies to office furniture, vehicles or even equipment. The cost savings between purchasing new versus old can be substantial. Of course, only purchase what is necessary instead of simply buying everything that looks “good”.
Make Use Of Community Resources
This could come in the form of government funding or sponsorships. In Singapore, there are numerous fundings for start-ups and small businesses such as Startup SG Equity, managed by SPRING Singapore, as well as the Productivity and Innovation Credit (PIC), an initiative under the Inland Revenue Authority of Singapore which allows businesses to enjoy discounted tax deductions.
Be Savvy With Money
Maximise cash rebates and sign up for loyalty programs for routine office purchases. It could be using a particular corporate card to enjoy cash rebates on office supplies or an airline loyal program should there be business travels. Small rebates and savings will accumulate over time, increasing the business’ savings in the long run.
Setting aside savings to ensure sufficient liquid cash for the business requires concentrated and conscious efforts from the small business owner or Accounting team. Ideally, there should be a target savings amount that the business should work towards. Once the target savings amount is achieved, it should of course, be set to the next higher amount. With discipline and mindful efforts, this will certainly provide the business with sufficient extra cash in the long run.
This a guest post by RenQun Huang of Gpayroll. The views expressed here are of the author’s, and Zegal may not necessarily subscribe to them. You, too, are invited to share your point of view. Learn more about guest blogging for Zegal here.
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