Over the years, new businesses in the US have faced many challenges to keeping their company afloat. There are many costs that come with running a business, including regulatory and compliance costs, labor, infrastructure, and more. Those costs often pile up and sink new businesses before they have a chance to get on their feet. Depending on the business, just starting out can cost hundreds, thousands or even millions of dollars.
There are better ways to save, though. Every business uses outsourced services of some type. Many businesses don't deliver their own products. For example, a business may hire outside cleaning services or get help with taxes and audits. Outsourcing can be a smart, resourceful way to save, especially for a new business. If a particular process is not strategic to your business, consider outsourcing it. You can outsource your human resource support functions, accounting, manufacturing, and even your executive staff.
It is common for companies in the U.S. to outsource manufacturing and assembly work to offshore facilities, such as those run by companies in China and other parts of Asia. This saves money because building a manufacturing plant is a significant endeavor. This would not only involve the purchase of a facility but also the manufacturing equipment and the hiring of workers. Over the last few years, outsourcing to onshore manufacturing facilities has become more viable and cost effective. When considering outsourcing your manufacturing, don't rule out the U.S.
With cloud computing, you eliminate the need for capital investment in technology, which offers usage-based pricing similar to electricity usage. With cloud-based technology, your computing resources, i.e., your hardware and software, are delivered as a service over a network—typically via the Internet. With cloud technology, you can achieve greater scale with fewer employees and little capital investment.
Fixed costs such as office rent, administrative and support costs, utilities, security, phones, and office equipment can also add up to a healthy sum for any business. Because of this, many companies are moving to a shared location and shared administrative service concept in the form of executive office suites. Such suites have full administrative support, do not require a long-term lease, have offices already built out, are generally found in several locations in a city, have facilities worldwide, and are very cost-efficient for new and emerging businesses.
FINANCE and ACCOUNTING
While using simple accounting packages such as QuickBooks is effective for small and mid-sized companies, this may not help your business as it grows. The biggest expense for a finance and accounting department is often the human resource element, including hiring and retaining qualified people. Unless your business is larger, however, you may not need a full-time CFO. To save on those costs, consider outsourcing all of your accounting and finance functions, which could include using a “fractional” CFO who would spend a few hours a week as your company’s financial executive. With an outsourced CFO, you have the knowledge and experience of a high-level professional at your fingertips for a fraction of the cost of having a CFO on staff full time.
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