Frugality is a quality that has helped many people in the past. It’s the idea of saving money and making the most value out of all of your purchases that draws people to the lifestyle, and it’s something that has been gaining traction in the world of entrepreneurship.
However, it’s not new.
Entrepreneurs like Warren Buffett have been living the frugal entrepreneurial lifestyle since they began and it has worked for them. It’s just that most people didn’t believe someone could be rich yet still watch their budget. It’s all about growing your business with the least investment possible and selectively choosing when you should and shouldn’t invest more of your money in order to do something that could have lucrative benefits in the future. To help you out, we’ve put together some fantastic points that will assist in growing your business without requiring you to invest too much money.
Identifying Your Current Position
The first thing to think about is your current position. Where is your business right now and where do you see your company in a few year’s time? Are you currently a small business that is just trying to make enough capital to grow, or are you a growing business that is attempting to fight off its growing pains and is quickly running out of money to utilize? There are many different positions that your business can be in and it’s important that you correctly plan out your growth.
This is important because you need to understand where you can make budget cuts and where you need to invest. For instance, a bakery must invest in high-quality ingredients and local marketing. They can afford to relax their budget when it comes to the online portion of their business especially if it’s seeing a low return on investment due to the business not offering anything over the internet such as deliveries or recipes. If your bakery website exists solely to show people where your physical store is, then you can afford to spend a little less on it.
On the other end of the spectrum, a logistics company must look at truck finance options if they want to scale up their operations and there aren’t many places where they can make budget cuts. In this case, it’s important to choose where you want to invest your capital in order to have the most impact. For example, if your current GPS solution for tracking your logistics vehicles is old and outdated, then you might make savings by upgrading it. It’s all about understanding where you invest your money based on your business’s current position and the best way to do this is to have a thorough understanding of your current workflow and how to best optimize it.
Always Look for Cheaper Alternatives
When it comes to running a business, there are always choices to make regarding your budget. For example, do you choose to pay for industry-standard software to help you work, or do you go for the budget options to save money? It really depends on your workflow and how you want to approach your workflow. Many companies incorrectly assume that you need to have the latest and greatest computers or software in order to do simple tasks such as word processing. This is a poor way to approach purchasing technology for your company because your needs won’t be the same as a larger company. As a result, you’ll end up wasting a lot of money that would have otherwise been invested into something else more productive.
Cheaper alternatives exist for virtually anything in business. It’s all about comparing the time you’ll save to the money you spend. If an expensive office productivity suite like Office 365 doesn’t improve the efficiency of your staff, then why pay money for it instead of just using Google Docs? If a computer that costs $1,000 doesn’t speed up tasks significantly or offer you features that are relevant to your workflow, then it’s probably not worth replacing your cheaper $500 computer.
Managing your budget is all about making smart decisions and looking for cheaper alternatives without compromising the quality or integrity of your business. As you continue to expand your business, you’ll find that some of the things you pay for just aren’t worth it. Whether it’s a subscription to a service you never use or computers that are far too powerful for what you’re using them for, there are plenty of ways to save money if you’re willing to look around and do some of your own research.
Be Actively Involved in Your Company
Another point to consider is that you need to be actively involved in your company’s procedures, advertising and general workflow. Although many business managers and entrepreneurs like to sit back and let their staff do most of the work, it’s important that you personally get your hands dirty if you want to save money and grow a business without spending too much money. Sometimes, it’s best to do something yourself if you want to get something done.
A good way to demonstrate the power of putting yourself forward is to take a look at the success Apple had with Steve Jobs acting as their keynote speaker. Even though he was both the founder and CEO of Apple, he still represented the company and built a personal brand around his own actions that connected with the company he was a part of. He didn’t just stay in the shadows commanding all of his staff–he played an active role in the success of his company. Not only does this help you save a significant amount of money, but it also helps you build a personal brand.
There is, of course, always a limit to how much you should be actively doing for your own company. Where the limit stands is dependent on how much work you’re willing to put into certain roles in your business, but if you’re not experienced at something such as accounting or human resources management, then it’s best to leave it to a professional by either hiring an outsourcing company to deal with it or to look for a freelancer. As you put hard work into your own business and take care of your own tasks, you’ll inevitably save money and build experience that can be used in the future to help you grow your business.
Master the Use of Social Media
Social media is perhaps one of the most important technological advances that have completely changed the way businesses approach consumers. In the past, businesses were proactive. They planned their advertising materials and messages ahead of time and they made consumers react to the trends that affected each industry. Nowadays, the connectivity of the internet has paved the way for audiences to band together, share opinions and influence each other to either buy or avoid certain products. As a result, it’s important for companies to get involved in that influencing process so that they can sway customers to buy their products and not their competitors.
Social media is a breeding ground of micro-influencers. This is a term used to describe someone that has some influence over a group of people that you consider part of your core audience. This is in contrast with traditional influencers who are celebrities and other big names that ask for several hundred thousands of dollars just for a single post on social media that mentions their brand. Micro-influencers typically don’t ask for money. Instead, they’re growing influencers on social media which means that appreciate anything they can make content with.
For example, if you’re a smartphone manufacturer and you want to get exposure, then sending out your product to a micro-influencer in exchange for a review is completely normal and an incredibly cheap way to get exposure. Since both parties benefit from it, it can be a lucrative deal that is far more effective than most traditional methods of advertising. In short, you need to master the use of social media and the power of micro-influencers in order to create cheaper ways to promote your brand. It might sound difficult or strange, but it’s surprisingly easy to use social media to grow your company once you get the hang of it.
Hopefully, this article has given you some insight into how you can grow a business while keeping frugal practices in mind. Sometimes it’s necessary to spend money, but how much you spend can drastically change depending on your approach. Whether you’re an SME or a business that just wants to cut down on their monthly expenses, use these points to consider what state your business is in and how you can accommodate growth without spending too much capital.