Most of the small businesses that existed in the early days of the internet were blogs. Individuals who managed to gather a significant amount of followers were able to monetize their site by selling advertising space, or by marketing their own products, such as a book.
These days, though, are long gone. Now, you can runny a full-fledged business purely online. You can offer a wide range of products or services, and you can do so to a truly global audience. Overall, the growth of online businesses has helped make it possible for countless entrepreneurs to live out their dreams.
Yet in spite of this hopeful message, it would be unwise to say that launching an online business and surviving the early days of your venture will be easy. You need to carefully manage your costs, choosing between investing in the business and taking risks and holding onto your cash so as to ensure you can meet your obligations. But keeping costs down doesn’t always need to come at the expense of growth, especially if you approach things in the right way. So, here are five ways to make sure you do just that.
#1 Stay In a Remote Environment
One of the primary benefits of an online business is that it can be run from anywhere where there’s an internet connection, and part of the way you keep costs down is to make sure this doesn’t change.
As you expand, the urge to go out and rent some office space so that you feel more professional may creep into your subconscious, but you need to do all you can to resist it. Office space is expensive, and it carries with it a whole other set of costs, such as utilities, insurance, taxes, etc., you’d be smart to avoid. These savings can then be invested back into the business to help support activities that are designed to actually generate profit.
Another way of maintaining a remote work environment helps you is that it allows you to take advantage of a much wider talent pool. If you need help, you don’t need to worry about finding someone in your area. Instead, you can get online and search around the world for the right person.
#2 Use Freelancers
Adding to this point, you should delay hiring people full-time until it’s absolutely necessary. Bringing on employees is going to cause costs to skyrocket, and it might not even be the best thing for you, as having someone full-time means you need to find a way to have them working at all times, otherwise, you’re paying for nothing.
Freelancers, on the other hand, only need to be paid for the work they do, helping you manage expenses. Some people may be hesitant to do this, but these individuals simply haven’t spent enough time working with the freelance community. Sure, there are some people who exaggerate their talents, but it’s quite possible to find someone who can really help out your business, and who costs a fraction of what a full-time employee would.
#3 Outsource Some of Your Marketing
Marketing is going to be one of the biggest and most important expenses you have to manage. Your ability to generate new leads and convert these into sales is going to make or break your company. However, it’s not enough to just achieve your leads and sales targets. If you really want to grow the business, then you must reach your goals in a cost-efficient way.
Many small businesses get caught overpaying for their marketing. Either they get overly-dependent on PPC advertising, or they rely too much on paid traffic through social media. In the end, how it happens doesn’t matter, but if you’re not careful then it will indeed occur. As a result, you need to be working to generate the most amount of leads for as little amount of money as possible.
A particularly effective way to do this is to outsource some of your marketing, though not to an agency, but rather to a group of people known as influencers. You can establish affiliate relationships with other people on the web who already have access to large followings. Ask them to promote your products or services in exchange for a small commission when they generate a lead or make a sale. Overall, this is a common arrangement that can provide real benefit to both sides.
#4 Automate Wherever Possible
We live in a data-driven world. This means that if you’re not using data to inform your decisions, then chances are you are missing out on opportunities to maximize your profits for little to no extra costs.
To be more specific, you need to be leveraging what you learn about those who visit your site into better sales. For example, are they coming from a specific geographic region? What do they do when they get to the site? If they buy something, are they likely to come back?
The Power of CRM
You can detect these trends on your own, but it’s going to require you to spend lots of time pouring over spreadsheets and Google Analytics reports. Instead, you could use an automated CRM platform, which can integrate with your Analytics account as well as any other services you use to collect data about your audiences. This software will then crunch the numbers about your customers, helping you identify areas where you could be doing better.
For example, it might show that the majority of your customers who buy one of your products have bought something else first. This tells you that follow up emails to those who bought the first product might encourage better sales with the second.
This information could transform your business, and you can get it rather cheaply if you start integrating automated solutions into your business.
#5 Focus on Process Optimization
It’s important to always remember that boosting profits doesn’t always mean bringing in new sales. This is obviously an important piece of the puzzle, but by focusing on process optimization, you can also cut costs and boost profits, or, perhaps better put, you can boost your margins and do more for less.
Take a good look at how you do everything in your business, and be critical of the way things are. How could it be better? Faster? More efficient? Speak to those who are helping you, whether they be employees or freelancers, to find out where improvements can be made.
If you’ve never done this before, then you’ll likely find areas of your business that are inundated with unnecessary steps. When you identify these issues, deal with them and watch margins improve.
Be Bold. Be Smart
You can’t grow a business without taking a risk and investing in it. The faster you realize this, the faster you will move forward with your vision. However, this doesn’t mean you should throw caution to the wind. The approaches outlined here help you set your business up so that it can grow, but also so that you can manage expenses. But don’t stop here. Keep up this attitude as your business moves forward. Extreme vigilance is required to continuously adapt and remain competitive.