By Magnus Nmonwu, Regional Director for Sage in West Africa
World Savings Day (31 October 2017) is coming up, a day generally not noted in Nigeria, which has one of the lowest savings cultures in the world. Yet, as one of the biggest contributors to the country’s GDP – at 47% - having savings in the bank is crucial if Small & Medium Businesses want to remain cashflow-positive and have some kind of safety net to cushion them during tough times.
There are many ways that small businesses can save money. You’ve probably heard most of them before: telecommuting, reduced business travel, flexible working arrangements and negotiating with suppliers. While this is all great advice, it also suggests a fragmented approach to saving money.
While saving a little here and a little there certainly adds up, I would like to recommend that you focus on just one thing – your culture. When you instil a savings culture within your business, everything else comes naturally, resulting in bigger, compounded and sustainable savings.
One thing to remember is that a savings culture is not just about saving money. It’s also about being frugal with resources and smart about time management, all of which impact the bottom-line in some way.
Encouraging a culture of savings in your business starts with getting your team into certain habits, many of which are not money related but still have positive financial consequences.
Although the jury is still out on this one, they say that it takes 21 days to form a habit so, for three weeks, leave notes by light switches, reminding people to turn them off, or use pop-ups on their PCs, asking if they really need to print that document, or if they can work off a digital version.
Habits tend to stick when they’re rewarded. Think of non-monetary ways to acknowledge savings in your business.
Encouraging reduced consumption across the business automatically lowers operating expenses with little effort.
Every team member who manages a budget – from procurement to marketing – should be given the tools, trust and authority to allocate their budget in a way that saves money while still meeting their business objectives. If, for example, the marketing department can save time and money by outsourcing the social media advertising function, empower them to make that decision.
Financial empowerment and a savings mindset should extend into your team’s personal lives, too. If you are unable to offer incentives like provident fund or retirement annuity, bring in consultants to educate your team on the benefits of savings and easy ways for them to save. You can’t expect your team to be smart with your business’ money if they don’t have the knowledge and tools to be smart with their own money.
Make it a game
Research has found that games improve employee engagement, motivation and learning – and what better use for gaming than to encourage savings in your business? People are naturally competitive and competing against colleagues to fill up their money banks faster will quickly become addictive – especially if it earns them Friday off.
Use the game to drop personal and business money-saving tips as your players move through the levels.
Time is money
Automate as much as possible – especially the mundane tasks that your team is probably procrastinating on anyway. Again, reward your team for finding innovative ways to save time or to do things quicker or more efficiently.
There are many unconventional ways to save money, time and resources. Think beyond the obvious and get your teams involved – you might be pleasantly surprised.