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3 Effective Cost Cutting Ideas for Your Small Business

3 Effective Cost Cutting Ideas for Your Small Business

While it’s always a  good idea to concentrate on ways to bring in new customers to your business and ramp up revenues as a result, don’t forget that you can help your cash flows significantly by cutting costs around the office, too.

When it comes to saving money in the workplace, there are many innovative ways that you can get ahead without feeling like you’re tightening the purse strings too much. Read on for some tips for cutting costs as soon as possible, that you may not have considered just yet.

1. Crowdfund for Capital

Whether you’re operating a fledgling startup that you’re just trying to get established, or currently run a solid business that has been around for a while, you will probably look for a loan or investment capital at some point along the way to help you grow your organization. If this is the case, keep in mind that you may be able to cut costs by crowdfunding for capital rather than paying for expensive bank fees and interest rates.

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In this digital age, technology and the rise in crowdfunding sites such as Kickstarter and Indiegogo, means that it is easier than ever to access a cash injection by unconventional methods. You can now connect with customers and investors who are keen to back your venture’s mission and product offerings through third-party sites which handle the paperwork while also giving you the chance to reach out to a receptive audience.

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    Do you, for example, need to raise some money to create, introduce, or try out a new product, or perhaps purchase an important piece of equipment for the production of certain goods? If so, you may be able to raise the money you need online, through a crowdfunding website instead of going to a bank or other lender.

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    You usually won’t have to pay too much in the way of set-up fees to list your information on a crowdfunding site, and generally don’t have to worry about expensive interest rates on the capital you raise either. Most crowdfunding investors simply want to receive a product when it is made or other low-cost goodies such as posters, T-shirts, key rings, signed copies of books, and other investment incentives. These are all usually much less expensive for a business to come up with than what they would have to pay when obtaining funds from a more traditional lender.

    2. Use Free or Low-Cost Information

    Before you go and spend lots of money on lawyers, accountants, financial consultants, and the like, it pays to remember that fees for such services can rapidly add up and end up costing you way more than expected. To save some money then, you should do everything you can to minimize the billable hours racked up by every consultant or service-based business you deal with.

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      Keep in mind that you will find a lot of valuable information and other resources for free (or just a low cost) online, at libraries, and through business or other groups that help entrepreneurs. You may even have mentors, colleagues, or family and friends who can provide you with the information you need. Even just spending some time searching through the results on a search engine such as Google can provide you with a lot of the information you might have had to pay for in the past.

      If you want to save some money consider, for example:

      • Online legal sites which provide free or reduced-rate legal agreements and case-law information
      • Accounting programs which provide tutorials, videos, and other step-by-step information to help people keep their bookwork in order and read or create reports
      • Free and low-cost photography websites which provide images you can use for your marketing and other tasks

      3. Utilize Freelance Websites

      No matter the type of business you run, you will likely have to, at some point in time, engage in activities such as graphic design, content writing, social media marketing, video creation, and the like to promote and grow your business. If you don’t have the skills and time yourself to handle these tasks, or have the staff on hand to do it for you, you will have to outsource the work to a company or contractor that specializes in each area.

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      While this used to be quite expensive, these days you can save some cash by trying out services on websites like Freelancer, Fiverr, and Upwork. It is important to be discerning when you select a person from those advertising online, but it is definitely possible to find experts in their field who charge a lower rate than traditional, larger outfits.

      Due to the fact that many professional service providers now work from home and don’t have to pay for large overheads such as office or retail space, they can charge more affordable rates. These savings can then be passed on to other business owners.

      Featured photo credit: fthmb.tqn.com via fthmb.tqn.com

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      Last Updated on June 6, 2019

      The Average Retirement Savings and How to Save Wisely

      The Average Retirement Savings and How to Save Wisely

      Are you on track for retirement?

      If not, don’t worry, I’m not sure either. I save each month and hope for the best.

      Fortunately, I’m at an age where most people don’t save so I’m ahead of the curve.

      But, what if you aren’t in your 20s? What if you’re near retirement and are looking to gauge where you stand?

      If so, keep reading. Here’s how to prepare for retirement and save wisely during the process.

      What Does the Average American Have Saved for Retirement?

      Saving for retirement is tricky.

      Tell someone straight out of college to save $10k a year for retirement and it’ll be next to impossible.

      Make the same request to someone decades older and they’d be more likely to be able to save this amount. But, a 20-year old college student can be “financially ahead” of someone saving more than them. Why?

      Age matters in your financial journey. The younger you are, the more time you have to save and put compound interest to work. As you get older and have more saving power, you’d have less time to put compound interest to work.

      Here are the average savings Americans hold by age bracket:

      20’s – $16,000

      During this stage, most people are paying loans and moving up the corporate ladder. Your best bet during this stage is to focus on eliminating debt and increasing your income. Don’t focus only on getting a high-paying job neither.

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      Instead, focus on learning via Podcasts, reading books, and taking specialized courses. Doing this will make you more valuable and give you more career options.

      30’s – $45,000

      At this stage, you’ve hopefully escaped your entry-level salary and work at a career you enjoy. Your earning power has increased but you now have more obligations. For example, marriage, kids, and a mortgage.

      Set a plan to pay off all your debt and focus on eliminating unnecessary expenses. Leverage financial tools like Personal Capital to ensure you’re on track for retirement.

      40’s – $63,000

      This is the stage where you’re at the prime of your career. Top financial institutions recommend you have at least 2 to 4 times your salary saved up. If you’re falling behind, start maxing out your 401K and Roth IRA accounts.

      50’s – $115,000

      During your fifties, you’re close to retirement but still, have time to save. You may be helping your kids pay college tuition and other expenses. Since you’re at the peak of your earning power, max out all your retirement accounts.

      60’s – $172,000

      By this point, you should have about eight times your salary saved up. If not, you’ll depend primarily on social security benefits averaging $1400 per month. Max out all your retirement options as much as possible before retiring.

      Ways to Save Money on a Tight Budget

      The sad reality is that most Americans aren’t saving enough for retirement.

      Even high-earning power isn’t enough to secure one’s financial future. You need to have the discipline to save for retirement while time is in your favor. Don’t wait for you to have a high salary to save, start with having a small budget.

      First, get a clear picture of where you stand. Write down a list of “needs” and “wants.” For example, Netflix and Amazon Prime are “wants” and a “cell-phone” is a need.

      Use tools like Personal Capital to analyze your spending patterns. Personal Capital allows you to add all your financial data in one place–making it a powerful option to gauge where you stand.

      Once you know all your expenses, organize them from highest to lowest expense. When you can’t cut more expenses, call your service providers to negotiate a lower price. If you’re not good at negotiating, use services like Trimm to lower your monthly expenses.

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      How to Save Money Each Month

      By this point, you know the average amount of money you should have saved for retirement based on your age.

      But, breaking this down into monthly goals can be challenging. Here are some rule of thumbs to follow:

      Aim to contribute 10%–15% of your salary each paycheck. Review your progress each week.

      Why so often? The reality is that life gets in our way and you will have many financial setbacks. Your goal isn’t to be perfect but to get back on track instead.

      Reviewing your finances weekly lets you know where you stand with your retirement. This doesn’t have to be a long process either. All it takes is login in Personal Capital to view your net worth and check how much you have saved for retirement.

      Turn saving into a game and aim to save more each month. It will get challenging but you’ll get creative and find more ways to save.

      Top Money Saving Challenge Tips

      To prepare for your financial future and not be another statistic you need to be different.

      How?

      By adopting new habits that’ll help you become a saving machine. Here are some ways you can save more:

      Automatically Contribute Towards Retirement

      If you’re working for a company, you can automatically contribute towards your 401k. If you’re not currently contributing more than 10%, make this your goal. Contribute 1% more today and automatically increase this amount a year from now.

      Odds are that you’re not going to be negatively affected by contributing 1% more. Many times we spend our money on things we don’t need. Contributing more towards retirement is a great way to secure your financial future.

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      Use the Right Tools to Know Where You Stand

      Once you’re contributing more towards your retirement accounts, gauge your progress. Make use of finance tracking apps to help you view the big picture of your retirement.

      When I’d first signed up for the app Personal Capital, I didn’t know I had a negative net worth. Despite saving thousands of dollars, my debt brought my net worth to the negative. Knowing this motivated me to save more and spend less.

      Now, I have a positive net worth. But, it was because I was able to view the big picture using the app. Find out what your net worth is using a finance tracking app and you may surprise yourself.

      Bring in Experts to View Your Blind Spots

      If you have too little or too much money saved, you should consider hiring financial experts.

      Why?

      You may need someone to hold you accountable to help you reach your financial goals. Or, you may need help managing your money as effective as possible.

      Regardless of the reason, getting help may help improve your financial situation.

      Before you hire an expert, find out which areas you need help the most. For example, if you’re constantly overspending, find a debt counselor. If you’re struggling with choosing the best investment options, hire a financial advisor.

      Speed up Your Retirement Contribution

      After learning how to manage your money well, the next best thing is to earn a higher income.

      You’re capped at how much you can save but not much you can earn. Even if your employer isn’t giving you a promotion, you can still take charge of your financial future. How?

      By starting a side-business.

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      This will be something you’d work on after you’ve finished your day job. Once you start earning income from your side-business, you’ll be financially better off.

      The best part is the more work you put into your side-business,[1] the more potential it has to earn more money.

      So start a side-business in an area you’re familiar with. For example, if you enjoy writing, do freelance writing for small e-commerce businesses.

      Once you’re earning a higher income, you can contribute more towards your retirement. Don’t wait for the right opportunity to secure your financial future, create one.

      Reach Financial Freedom with Confidence

      What if you were able to retire tomorrow with no problem, all because you’d have enough money saved up and little to no debt left to pay off? How would you feel?

      My guess is that you’d feel happy and relieved.

      Most Americans are falling behind their retirement goals for many reasons. They’re not prepared, they carry bad money-habits and are thinking short-term.

      For you to retire successfully, you need to work backward and adopt better habits. Contribute more towards your 401K and focus on growing your income.

      If you do, you’ll save money and pay debt faster.

      Don’t beat yourself up if you’re behind your retirement goals. Take the first step today towards a brighter financial future. Isn’t retirement worth the hard work and sacrifice to be at peace?

      Featured photo credit: Huy Phan via unsplash.com

      Reference

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