It’s no surprise that factoring businesses, new or old, rely on steady and abundant cash flow in order to be profitable. Being smart about how and where to efficiently manage funds can make or break the difference between flourishing and floundering in the world of factoring. Check out these ideas on how to cut costs so that you’re not overspending in areas that could be hurting your factoring company.
Replace Print with Social Media
It may not seem like a big deal, but the use of social media for marketing is no longer an option. Given that social media/networking is the top online activity in the US, small businesses can use it to capitalize on increased brand exposure, web traffic and even possible sales.
Social media offers companies a new and (mostly) free way to communicate and have actual conversations with their customers. It lends a multi-dimensional ‘ear’ to what your customers are looking for or need, without expensive surveys or annoying feedback quizzes. Additionally, it won’t cost much to explore and experiment with different campaigns.
Remember the Ice Bucket Challenge for ALS? It seemed like we might not ever STOP hearing about it, but it raised both awareness for Lou Gehrig’s disease and millions upon millions of dollars. No one can deny that it was one of the most successful viral campaigns EVER. According to the ALS website, over $115 million was received thanks to the ubiquitous social media storm. Obviously not all campaigns will be as successful as the Ice Bucket Challenge, but boosting your online presence and creating a community via social networks for your business is tantamount to increasing brand awareness and generating new leads.
Tax Deductions & Discounts
As Benjamin Franklin quipped, the only things certain in life are death and taxes—especially in business. However, your factoring business may be eligible for certain, more obscure tax breaks or other small business discounts.
Office supplies, travel mileage and even business schmoozing can all be considered for tax deductions. If you aren’t sure what’s legal or not, it’s worth spending the money in a quality accountant that specializes in these types of deals if they can help save you big bucks overall.
Temporary Staffing or Interns
Chances are your business might have ebbs and flows of busy periods. In these instances, look for part-time employees or interns.
Interns are generally hungry for experience and resume builders, and therefore might be willing to forgo insurance or vacation time. Part-time employees will ensure that you get the work you need done without being consistently over-staffed or paying for employees to sit idle.
Appealing to the Masses
Trying to market your factoring services to everyone and anyone might seem like a good tactic at first. However, when trying to reduce costs, less is more and smarter is better.
By being super specific and clear about who your target audience is, chances are you’ll be more successful in attracting the right customers. In the long run, knowing your customer demographic will mean better predictions for the future about their wants and needs and you won’t waste money marketing to business owners who aren’t interested.
Lease or Buy Used Equipment
This is probably one of, if not the most, expensive start-up cost.
Capital equipment, furniture and technology can all add up. Just like your car, equipment depreciates almost immediately after buying, so even equipment that is 1-2 years old can be in exceptional shape, but cost way less than brand new.
Shop around, look for auctions or companies going out of business and do market research on what you’re looking for. Try to remember that having the fanciest, newest gadgets might not ultimately lead to business growth, sales or new leads. Start small and keep it basic. This way, when you have the means to upgrade or invest in newer fixtures and other materials, go for it.
About the Author: Factor Finders specializes in finding factoring companies that can fund difficult-to-place deals. Our services help other factoring brokers capitalize on commissions that might otherwise be lost.
If you have a prospective transaction that you cannot find a funder then contact us at FactorFinders.com. We’ll find the factor for you and split commissions 50-50.
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