The best entrepreneurs know how to stretch a dollar. They cut costs and streamline operations to squeeze out as much profit as possible.
Technology can help. However, the range of tech tools out there can intimidate even the most savvy business owners. Here are five types that can cut costs.
Energy-saving technology: Saving money on utility bills requires a proactive approach. Consider motion detectors in your building or home office that will shut off unused lights, and seek a weatherization consultant who can locate poorly insulated pockets that release heat. If it’s available in your area, consider a Google PowerMeter. This high-tech tool helps you monitor and reduce energy usage from any Internet-connected device.
Upfront costs deter many entrepreneurs from these approaches, but saving energy is a sound investment. It lowers bills while currying favor with an increasingly green -conscious buying public.
Software as a service: As software companies offer an increasing number of Web-based applications, more entrepreneurs are trading boxed discs for subscription-based solutions. In his book "The New Small" (Motion Publishing, 2010) technology consultant Phil Simon cites this tool as one of best ways small businesses can gain an edge over their larger counterparts. Companies such as 37signals offer a suite of products that allow for remote collaboration, client relationship management and schedule coordination.
Mobility is this tool’s key benefit: Software subscription costs add up, but having employees work remotely can save on office space and boost productivity.
Remote data storage: Storing business data in rented service space is proving a popular option as cloud computing takes hold. Big players like Microsoft and smaller firms like DropBox offer convenient ways to ditch big hard drives for cloud-based storage.
Productivity is enhanced when remote workers and entrepreneurs have access to information from wherever they are. It’s a feature that prompts many businesses to overlook these services’ relatively high per-gigabyte costs.
As entrepreneurs consider the cloud, they should also consider data safety.
“Cloud computing is a great option,” said John Torrens, a professor at Syracuse University’s Whitman School of Business, “but some firms may require other options that include more privacy and security.”
Before entering academia, Torrens founded a company that provides medical services to children with disabilities. He notes entrepreneurs working in the health or education fields, in which strict regulations govern data management, must exercise caution before opting for remote storage and other cloud-based services.
Free software: Before plunking down a small fortune on word processing and spreadsheet software, see if you can find the equivalent cheaper or for free. Open Office is a popular rival to the traditional Microsoft Suite, and a quick search online turns up dozens of no-cost ways to accomplish tasks like converting PDFs to editable Word documents and generating bar codes to track inventory.
Social media marketing: Trite as it may sound, spreading the word via social media methods is an effective, low-cost way to market your business. But it takes time.
“Believe it or not, it could take two or more years to see results,” said A.J. Vaynerchuk, co-founder of the New York-based VaynerMedia, which helps large companies bolster their online presence. And it pays to stay involved; strong efforts fail when entrepreneurs abandon a community they helped build.
Simon, the author and small-business consultant, said that while it holds great promise for entrepreneurs, technology requires effort. “No technology is an elixir,” he said. Simon recommends that business owners spend a bit of time each day learning about new tech tools and finding out which work for them.
- 6 Steps to Take Before Starting a Business
- 5 Marketing Costs You Should Cut Today
- IT on the Cheap: Simple Solutions for Small Business Owners