Seven tips for young digital entrepreneurs to reduce operating costs

Fortunately, entrepreneurs can accomplish this in a number of ways. Using cost saving tools and finding cheap, yet effective ways to market one’s business are some of these. Take a look at the following industry savvy tips we have put together to help digital entrepreneurs cut down operating costs and control them.

The objective of the digital entrepreneur is to reduce spend and keep profit targets in check. Use SaaS applications to automate routine business functions and save time and operating costs. One pays a premium for the use of the SaaS applications for a length of time. There’s no need to purchase them outright.

This means one can just use the tool as and when without having to invest in servers or setting up operating systems to support electronic components and tools. This saves costs and eliminates the need of recruiting a dedicated person to monitor basic functions. SaaS applications such as Xero or FreshBooks can take care of payroll management, taxation, accounting, invoicing, and more. One can generate regular reports to ensure everything is working as it should be.

Servers cost money and require maintenance in addition to causing stress. Then there’s the issue of maintaining all business data securely in one place. Moving server and data infrastructure to the cloud saves costs and removes the hassle of constant monitoring. One can host a business website using third-party vendors such as GoDaddy or HostGator, and pay more as needs grow. Data can safely reside within a secure Google Drive or DropBox, Amazon Web Services, Microsoft Azure or even Hadoop.

Hold on to any paid advertising efforts that are working, but do move on to social media marketing at the same time. Start a blog and share your expertise honestly and freely. Build an audience and connect with them. Follow your audience members on Twitter and Facebook and ‘Like’ their posts. This will help you get genuine likes back from them without incurring extra marketing costs.

Invest in eco-friendly technology and save a lot of money annually. This move will save you Phantom power, which is energy that is used by plugged-in devices even if they’re not being used. Make sure all chargers, printers, lamps, computers, and even the coffee machine are turned off when not in use. Plug all ambient devices into a smart power strip. This cuts off standby power and helps conserve energy, while protecting devices from electrical surges. Adjust computer monitor display settings to conserve energy so that they use less energy when not in use.

Look up all insurance policies - fire, burglary, assets and health and evaluate the rates being paid. Look for other providers who offer more competitive rates and then ask your current provider to match those rates. Avoid paying fees for multiple accounts; consolidate insurance policies or bank accounts wherever possible. Take a good clean look at insurance policies to be sure that there are no incidents of insurance duplication or over coverage.

Debts can tie up an entrepreneur like none other. Evaluating debts and being savvy when taking out fresh loans will go a long way in freeing up more money to meet operational costs. Debts and interest payments eat into one’s operating budget. Evaluate all your current capital loans and negotiate with other banks for better rates, if possible. Avoid taking on debt in the future, at least not without doing thorough due diligence, cost-benefit analysis and future forecasting. Wait on business expansion until debt payment impact on cash flow is fully analysed. Take on fresh debt only if the organization can truly afford the payouts.

Before investing in expensive software, shop around a little. There’s a free software version for every paid tool that is used by businesses. Avoid subscribing to the paid KISSmetrics for analytics - Google Analytics is fantastic and free. Get rid of landline phones; we’re not in the sixties anymore. Get the almost-free phone solutions from a Voice Over IP (VOIP) solution provider. Save money on business travel; use the latest free video conferencing tools to connect with faraway clients. Skype, FaceTime and Web conferencing tools work just fine. Subscribe to a free email marketing service such as MailChimp until the subscriber list crosses a million or two.

Conclusion
Digital entrepreneurs can cut costs in various ways. Adopting green technology’s mainstays can not only help cut costs, but also benefit humanity in the long term. Free or inexpensive antivirus, USB storage devices, and efficient and free communication tools - all offer ways to save costs. Finally, it boils down to one thing - it’s not about saving costs, it’s about investing in only that which is needed.