It should be no surprise that running a business is not a walk in the park. It’s wrought with challenges and hardships in different facets of the business, with financial difficulties being at the centre of it all.
Having said that, entrepreneurs find it a constant challenge to keep their finances stable while balancing all the other aspects of maintaining smooth business operations. While many crash and fail in this endeavour, some rise above the challenge and maintain a good system that allows their business to flourish and expand.
If you want your business to undergo this positive transformation, then that starts by being smart with your funds and allocating it to the right parts of your business. Vancouver entrepreneurs often use these tactics to give themselves and their businesses an edge in the local and global market.
Without further ado, let’s explore five clever financial hacks that you can utilize as a Vancouver-based entrepreneur to keep your expenses lean and agile. Let’s jump right into it!
1. Start Lean With Shared Workspaces
Vancouver business owners know full well how expensive commercial rent is in their city. Finding a space that you can lease without compromising on things that make your commercial space serviceable for your business needs can be tough.
But it’s not outright impossible. One way that early-stage entrepreneurs are starting to save on costs is by leasing shared workspaces in cheaper areas of the city. These spaces offer affordable rates and flexible terms that can help business owners with minimal capital get started with their projects without needing to buy office supplies and equipment upfront.
Many entrepreneurs are choosing coworking spaces or flexible office rentals to house their current base of operations. These spaces already have built-in amenities like tables, chairs, and a business address that can be used by stakeholders to conduct daily operations or send and receive goods and mail.
Furthermore, shared workspaces also allow you to be in close contact with other professionals in the city. As a business founder, having this network within close proximity can be crucial for paving the way for new opportunities. But beyond that, a shared workspace also can grow as your business grows, making it less of a bottleneck when focusing on your business’s potential.
When choosing a coworking hub, be sure to review the terms and amenities provided so that you’ll know what you’re setting yourself for. By doing this, you can more smoothly run your operations without worrying about excessive rental costs or needing to purchase a lot of assets as you start expanding and hiring more people.
2. Tap into Entrepreneurship Grants
The Vancouver government can be pretty generous when it comes to providing entrepreneurs with incentives and grants to keep their equity at healthy levels. Local business owners know the importance of tapping into these opportunities as a lifeline to give their startup or business a fighting chance to gain traction and stabilise itself as a local industry name.
In British Columbia, some of the most popular funding programs include the Scientific Research & Experimental Development tax credit, which refunds a portion of R&D expenses; the Canada Job Grant, which covers a significant chunk of employee training costs; and the Innovator Skills Initiative, which $10,000 worth of subsidies for hiring tech talent.
That said, there are many more grants that the government applies for specialised industries—you can try to search for them in the Business Benefits Finder website. By applying to these grants, you can make your business productive without dipping into your own limited capital.
3. Protect Earnings From Intermediaries
When running a business, it’s not uncommon for portions of your earnings or a sizeable chunk of your expenses to be eaten up by intermediaries. And one of the most common culprits for profit loss is currency conversion.
When dealing with foreign currency, a traditional financial institution may charge an additional 2-3% for every transaction to initiate a conversion between two currencies. When done frequently over time, this can add up to a very significant amount, ranging from hundreds of dollars to the thousands.
Instead of stomaching this business cost, it may be worthwhile to consider turning to other payment solutions to keep your costs from running too high.
For instance, you can initiate conversions in FX platforms and digital payment apps like OFX and Wise that offer currency conversion as their core product instead of a side feature. These products offer much more competitive market exchange rates with lower transfer fees.
Another way to protect your earnings is by accepting foreign currency using your current banking or wallet account. Some payment platforms allow you to open multi-currency accounts to manouever past the conversion process—allowing you to keep the funds intact without needing to incur additional fees. If you plan to buy things in foreign currency (i.g, USD), this extra account can serve an excellent purpose to avoid the loss of undergoing two rounds of conversions.
4. Purchase Inventory in Bulk
When you’re dealing with raw materials or inventory in the thousands or more, it’s a good idea to buy inventory in bulk. This reduces the per-unit cost as it cuts on shipping and customs fees, especially if you’re buying from someone outside of British Columbia. It can also leverage negotiations on your end as you prove to suppliers that you’re a reliable and trustworthy client.
Of course, buying in bulk requires careful cash flow planning and storage solutions to ensure that you won’t worry about excess items in your warehouse or spoiled ingredients. The key is to work your way up to scale inventory strategically. Consider the turnover rate and gradually build up your bulk purchases.
By doing this, you can save more from bulk purchases and keep a healthy working relationship with your suppliers, thus paving the way for potential bulk discount discussions and even more savings.
5. Outsource Smartly
When your business undergoes a gradual and steady expansion, the need to hire more hands also increases alongside it. Instead of hiring full-time staff, it may be more optimal and cost-effective to outsource work to talent from overseas territories.
The reason is simple: these global talents can do a similar job at a fraction of the rate that you’ll have to pay local staff and they’ll be happy with it. They also don’t come with the overhead of hiring permanent workers.
The work these remote assistants can do isn’t limited to simple administrative tasks. Specialised tasks like bookkeeping, web development, graphic design, and web development can be outsourced to specialised staff, making operations much smoother. Of course, you must be selective when hiring to ensure that you’re receiving quality work.
We hope you’ll use these financial hacks to keep your business agile and productive. All the best in running your local company!
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