Ways to reduce the business costs and become more profitable

Small businesses are established with a very small capital base and usually have minimal working capital finance. It has been seen that an SME Entrepreneur has to worry about acquiring customers and reaching them efficiently, it is  also more important to save and reduce the cost structure. This is where technology becomes a very import part in any business. To keep pace with the changing & challenging times, new-age tech players and many startups are joining the fray with solutions which are beneficial and affordable for small businesses.

These solutions help in reducing the costs, thus making them competitive both in global & domestic markets. Here are seven ways that SMEs can reduce business costs and become more profitable. Marketplace (for purchase and sales of goods and services)

There was a time when one of the biggest hurdles for an SME business was to reach out to the cheapest raw material supplier or make sure their goods/services reach beyond their local area.

B2B ecommerce platforms

B2B ecommerce platforms such as Flipkart, Udaan, Amazon Small Business, and Amazon Seller Services along with many similar platforms, have extended the reach for SMEs to practically every nook and corner of the country. The e-platforms provide them with platforms to showcase their products and help them with logistics and warehousing as an add-on. All this make the entire sale & purchase function efficient and also economies of scale comes into existence which were earlier present just for large players.

Accounting Solutions

Accounting solutions Most SMEs used to maintain their accounting in physical books and at times, it used to get very difficult for them or for their lenders to decipher the true value of the business, and also comprehend the receivables and payables. Now, with byte-sized accounting solutions made available online by players such as Tally, ZOHO, and even SAP have not only made the entire accounting a hassle-free process, but also very affordable. Additionally, with GST and Income Tax filing available as a plug-in for these apps, it makes accounting a fun activity, which can be done on the go by the SME promoter.

Digitisation of payment solutions and related infrastructure

Digitisation of payment solutions and related infrastructure has been a biggest jump in the SME sector. This has happened across the globe, and now making and accepting payments has become a very easy process, especially for the small businesses. Today, India can boast of having the world’s most advanced payment stack — whether it's UPI, NPCI-supported NACH, IMPS, or even payment gateways.

HR software

Most of the SME entrepreneurs also double up as HR managers, and usually manage their workforce on their own using some primitive methods. With the entire HR function digitised and available on apps, it has not only transformed the entire process but also allows SMEs to function without spending additionally on HR personnel, consultants or even HR solutions. Firms like diyhr, shareyourhr, Kredily, SumHR, Keka etc, provide affordable solutions which are available across platforms and practically cover all HR functions. 

Office suites

The very high costs of office productivity suites force small businesses to buy the pirated & duplicate  copies and infringe on the copyright laws. However, a lot has changed in this space and office suites are no longer just limited to Word, Excel, and PowerPoint. They have got extended to cloud storage drives, video conferencing tools, e-mail clients etc.

All these solutions now also come with easy payment options and a variety of combinations to choose from. Additionally, they are completely secure and upgradable. These solutions improve the productivity of the SMEs and makes them equally efficient and competitive to the much affluent and larger corporates. Many businesses quickly adopted some of these solutions during the pandemic.