Estimated reading time: 3 mins
If you had all the money in the world, the topic of frugality wouldn’t matter to you. You could spend what you wanted, when you wanted, and on what you wanted.
Unfortunately, it’s important to be realistic. As is the case with many business owners, you will be keen to save money where you can, as you might end up risking your business if you don’t.
Being able to show frugality is a must then, but it’s important to know how. Sometimes, being frugal can be inappropriate, as cutting back on spending isn’t always the right thing to do. As we discussed in the following linked article, sometimes, you have to spend money to make money. However, there are other areas where it’s okay to spend less than you might have otherwise.
Here are some examples.
#1: Consider hiring freelancers and contractors before bringing in new employees
If there is little need for you to hire new employees, then don’t. Manage the staff you already have on your payroll, and for those occasional tasks that don’t fall into their remit, hire freelancers or contractors instead. This way, there will be less need to waste money during the hiring process. You won’t have to pay an extra wage. And you won’t have to spend money on training up a new hire.
Of course, once your business starts to grow, and when you do need more help to run your business, it might be more cost-effective to hire somebody part or full-time. It’s about being sensible and knowing when you should or shouldn’t bring in a new employee. You need to ask yourself these important questions. Will a new employee be a drain on my funds? Or will they be an asset? If it’s the former, outsource instead.
#2: Always shop around before coming to a decision
You would do this in your home life (we imagine), so consider the same in your business life. When shopping around for your business needs, don’t take the first deal you see.
So, when you’re looking at financing a small business purchase, opt for a finance company that can offer you a competitive rate. When looking for a supplier, opt for the company that can both offer you savings on the products you regularly need and that can provide you with cheaper shipping prices. And when you’re looking to incorporate specific technologies in your business, don’t always go for the flashiest or the most expensive. Instead, choose the tech that is both relevant to your needs and within your budget, even if you have to buy second-hand.
It’s about showing financial wisdom and restraining yourself from making a decision that could put a deeper hole in your finances.
#3: Know that you don’t always have to spend money
Why spend money when you can buy or do something for free? Especially when money is tight, you don’t always have to open up your wallet.
So, when you’re looking for applications and software products, don’t pay for premium packages if you don’t need the added bells and whistles. Opt for the free versions instead. When you’re in need of equipment, see if other businesses are open to a trade before splashing your cash. And remember that there free ways to promote your business before you put a dent in your marketing budget.
By curbing your spending, you will have more money to put aside for those purchases that do require the expense.
Spending money is sometimes a necessity, but it’s about knowing when and how much. If you can make savings in areas that don’t always require a huge expense, you will safeguard your business from financial harm and have money in your bank account to grow your business.