Many businesses across the United States are working on tight budgets, requiring them to plan creatively and think out-of-the-box with how they approach spending. When operating on a tight budget, business owners can look at their financial forecasts and look for areas where they may be overspending, or, spending inefficiently. Recognizing problem areas ahead of time can help business owners when they sit down to create a realistic long-term strategic plan for their operations. 

Refine products and product mix

Businesses often spend too much money on products or services which make little contribution to their bottom line, which reduces margins and ROI, Inc. Magazine recently reported. One way businesses can combat this is by focusing on their higher margin products. According to Scott Anthony, CEO of consulting firm Innosight, simplifying products will make them less expensive to produce. If simplifying your product is not an option, simplifying your product offerings may be a great way to save. As revenue streams grow, and there are more resources available, then companies can readjust their strategic plans to allocate more funding toward developing items with higher production costs. Producing products that align with a budget is key to sustaining future growth and obtaining both short-term and long-term objectives.

Use free services

Far too many businesses use expensive email services and storage products, when there are more affordable options available. Paul Graham of startup lender Y Combinator told the magazine that typical startups only have laptops, internet connections and servers in the IT budgets. There are several free services these businesses can use for email, storage and meetings, such as videoconferencing, that help companies save a lot of money. Companies need to develop a strategic plan that outlines how they plan to use this type of technology; from there, they can then determine whether a high-cost email service is essential for their business strategy, or, if a free solution is a more practical financial option.

Understand business limitations

Business owners can often becoming unrealistic while financial forecasting, and project higher numbers for sales and revenues. By being honest with themselves and using accurate budgeting software, business owners can have a greater feel for when they will have available capital. Keith McFarland, founder of McFarland Strategy Partners, suggests taking the number of projected revenue over the next year and reduce it by roughly 10 percent. The reduced figure should be the number a business owner adds to his or her budget for the next year.

Use email to communicate with customers

For years businesses and customers have relied on the phone for placing and receiving orders; however, this method can be expensive and inefficient. By cutting phone expenses and using email or other cost-effective customer service platforms, businesses can not only take advantage of a less expensive form of communication, but they also have a documented record of correspondences with customers. According to Richard Thalheimer, founder of The Sharper Image, email is much more efficient than communicating with customers over the phone. So, not only are businesses able to help their bottom line, they may actually be able to improve their overall client communication strategies.  A small number of customers may resist at first, but the key to implementing this type of customer service platform is being transparent about its benefits to both you and them.

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