Article | April 13, 2020
Artificial Intelligence (AI) has become one of the fastest-growing technologies of our generation. It has all kinds of applications in industries like healthcare, education, and of course, commerce. Small business owners can grow their companies at a faster pace and on a bigger scale on the back of AI-powered platforms. Below, we discuss 5 such amazing platforms.
Article | July 15, 2021
Last year was challenging for marketers as well as all business owners due to the global pandemic. As a result, it gave rise to every organization's digitalization, and recognized the extensive benefits of cloud computing technology. Any sized organization can take advantage of the effectiveness of cloud computing, and in the case of small businesses, it can be overwhelming. Henceforth, business owners acknowledge the comprehensive and extensive benefits of cloud computing for small businesses to drive tremendous business growth. Integrating cloud computing technology is a new norm of today’s digital world and is not just a catchphrase anymore.
The market for cloud computing is vast. In 2020, the global cloud computing market valued at $371.4 billion, and estimates stated that by 2025 it would rise to a staggering $832.1 billion. According to Statista, Amazon Web Services has a 32% market share in cloud computing.
This blog will elaborate on the benefits of cloud computing for small businesses. But, before we cover up the core aspect of this blog, let us know what exactly cloud computing is and why it is ideal for small businesses.
What is cloud computing?
Cloud computing has been around us for two decades, and we have been using it in day-to-day activities without our knowledge but has gained popularity in just over the past five years. The popularity is basically due to the increased reliance on handling and storing big data.
What exactly is cloud computing? Cloud computing provides end-users (or business owners) to access their data, programs, and applications stored on a remote server anywhere, at any time, on any mobile device via the internet.
There are three different ways to deploy cloud services: on a public cloud, private cloud, or hybrid cloud. In addition, cloud computing provides various cloud services such as cloud storage, cloud backup, and cloud hosting.
Cloud computing services classified into four types:
Infrastructure as a service (IaaS): It is the most basic cloud computing service. You can rent IT infrastructure servers and virtual machines (VMs), networks, storage, and operating systems from a cloud provider on a pay-as-you-go basis using IaaS.
Platform as a service (PaaS): It provides an environment for developing, testing, delivering, and managing software applications on demand.
Serverless computing: Serverless computing, which overlaps with PaaS, focuses on developing app functionality without constantly managing the servers and infrastructure required to do so.
Software as a service (SaaS): Software as a service (SaaS) delivers software applications over the Internet on demand and typically through a subscription. Cloud providers host and manage the software application and underlying infrastructure and any maintenance in the case of SaaS.
Why is cloud computing ideal for small businesses?
Cloud computing has made doing business much easier for all businesses, especially for small businesses. As a business owner, you can gain tremendously by incorporating cloud-based computing into your workflow. The popularity and importance of cloud computing applications for small companies is very clear. It enables increased efficiency, cost-effectiveness, reduces operational costs, access anywhere, reduced risk during the crisis, and improved cash flow helps solve many business challenges.
Cloud technology makes mobile access to data easy for small businesses, thus aids them to be more competitive on a global scale. Companies can reduce IT costs by utilizing innovative products that provide storage, software, and infrastructure via the cloud. Furthermore, cloud service providers' monthly or yearly billing rates can help you avoid unexpected costs such as emergency server repairs.
Cloud computing application has a few setbacks to be considered as well.
Drawbacks of cloud computing are:
• For starters, implementing any new technology necessitates personal training and a practical troubleshooting system both before and after the launch.
• Another issue to consider is security. In general, no business is immune to cyberattacks. The trick is to find a reliable cloud service provider, understand its backup plans in the event of a security breach, and take your security precautions.
Now let us know the distinctive benefits of cloud computing for small businesses in precise.
Benefits of cloud computing for small businesses
More flexibility and scalability
The most significant benefits of cloud computing for small businesses are increased flexibility and scalability in the workplace. Companies with on-premises systems used to and have to purchase server and workstation upgrades to accommodate new users. The importance of cloud computing stems from the fact that it allows you to work from any location and at any time. In addition, employees have more flexibility in and out of the workplace, thanks to cloud computing. Because data is stored in the cloud and web-based applications, you can run your business in the cloud and give your employees access to it at any time and from any location.
Cloud computing applications can be scaled up and down quickly and cheaply. Everything from bandwidth to processing power can be scaled in the cloud. When peak demand has passed, you can reduce your service plan to save money.
Easy data recovery
Data loss can be devastating to any business, especially a small business. Data loss results in wasted money, loss of time, and lost productivity; besides, downtime is never good for business. According to CloudRadar, network downtime costs more than $10,000 per hour.
In-house data backup system setup is out of reach for most small businesses, but cloud computing makes backups and disaster recovery simple for SMBs. The scale and expertise of cloud-based services make data recovery quick and even remotely extracting data from a lost laptop possible. Easy backups are one of the most significant benefits of cloud computing for small businesses.
Improved data security
When a cloud solution is integrated into a business, data is maintained in a centralized location, making it far more convenient to secure centralized data from cyber-attacks than stored on various devices. In the wake of COVID-19, cybersecurity threats have increased phenomenally. Therefore, data security with cloud computing is highly beneficial for small businesses.
Another advantage of cloud computing for data protection is that even if a single device is lost, the data will be safe from unauthorized access. Cloud computing can be used for data protection in authentication and identity, access control, encryption, secure deletion, integrity checking, and data masking. Therefore, it is exceptionally advantageous to rely on cloud computing for data protection for small businesses.
The cost of cloud computing varies greatly depending on the type of cloud service you choose. Cloud computing for small businesses, on the other hand, is highly recommended because it requires far less maintenance. You will not need any other physical IT resources, software, in-house computer equipment, or anything else, which means you will save a lot of money. One of the most significant benefits of cloud computing for small businesses is reducing IT operational costs.
Since cloud-based services are significantly less expensive to use, small and medium-sized businesses recognize the benefits of cloud computing applications appropriate for their limited budget. If small business owners are interested in the efficiency and cost-effectiveness of cloud computing, they must incorporate it into their business workflow.
One of the primary benefits of cloud computing is easy remote access, which can be seen clearly in the pandemic. The most basic example of cloud computing is your email account, which can be accessed from any computer using only your login credentials and an internet connection.
Cloud-based services are now available on mobile apps, so you are no longer limited to devices. Cost efficiency of cloud computing is essential for small businesses, and cloud-based applications can result in cost savings. The benefits of cloud computing for small businesses are endless, but remote access has an edge.
Frequently Asked Question:
How do small businesses use cloud computing?
Small businesses use cloud computing services via broadband internet and smart mobile technology. Cloud computing enables small business owners to store and back up their expanded company data. In addition, this technology is used by small businesses for accessible operations and applications.
What is the best cloud computing solution for a small business?
Popular cloud computing solutions for a small business include Microsoft Azure, IDrive, Microsoft365, Google Drive, Dropbox, Shopify, Mailchimp, and SpiderOak.
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"text": "Small businesses use cloud computing services via broadband internet and smart mobile technology. Cloud computing enables small business owners to store and back up their expanded company data. In addition, this technology is used by small businesses for accessible operations and applications."
"name": "What is the best cloud computing solution for a small business?",
"text": "Popular cloud computing solutions for a small business include Microsoft Azure, IDrive, Microsoft365, Google Drive, Dropbox, Shopify, Mailchimp, and SpiderOak."
Article | July 29, 2021
The first and crucial part of building your small business is setting up finance for your business. Overhead costs for small businesses are also included in this broad category of business finance. An old proverb, “You need to spend money to make money,” gels perfectly with the business notion.
Business owners spend a lot of money creating a product or service, which is considered “direct costs.” Some expenses are not directly related to the creation of a product or service but aid in the operation of your business; these are referred to as "overhead costs" or "indirect costs." However, from an accounting standpoint, overhead costs are not considered expenses at all.
Small business owners have a lot of costs to consider especially overhead costs. Here are a few examples of overhead costs: a business license, accounts payable, invoices, office supplies, accounting, and legal fees, bank fees, and many more to pen down.
Business owners are behooved to be careful and make sure that their expenses should not outweigh their income. Business overhead is one area that most businesses face, and it is worth investigating further and managing it accordingly.
Overhead expenses consume most of the remaining space on your profit and loss statement. However, cutting your overhead costs will improve your business finances.
Let us further discuss few aspects of overhead costs and how to reduce overhead costs for small businesses.
What Are Overhead Costs?
Overhead costs are the indirect but requisite expenses for running a business. These costs do not directly generate revenue for the company, but they do not change as your business grows. Overhead costs must be borne even if no products or services are produced or sold for a period and cannot be
Here are few examples of overhead costs for small businesses:
Electricity bill, gas, water, internet, etc.
Rent for office spaces, warehouses, etc.
Business licenses and permits
Marketing and advertising materials.
Salaries and wages
Insurance for vehicles, employees, and properties.
The key is to keep track of your overhead costs and not let them interfere with your efforts to grow your business and turn a profit.
Once your concept of direct and indirect costs is cleared, the calculation of overhead costs becomes relatively easy.
Types of Overhead Costs
The overhead costs are divided into three main categories that can directly affect your small business fixed costs, variable costs, and semi-variable costs. Fixed costs are easily trackable. Below are few types of overhead costs for small businesses.
Fixed Overhead Costs
The majority of your business expenses fall under fixed overhead costs and do not change regardless of the profit earned by the company or change in the level of output; it remains the same each month. Fixed costs are easily tracked and managed as well.
Fixed costs are pretty predictable and are required to keep a business running smoothly.
Few examples of fixed overhead costs
Renting a manufacturing facility or a corporate office.
Fixed asset depreciation expenses.
Software subscription fees.
Fixed overhead costs are stable and do not deviate from the amounts budgeted for them. However, there are a few exceptions, such as if sales exceed what the company budgeted for, in which case fixed overhead costs may rise as new managers and administrative staff are hired. More employees are added to the company.
Similarly, if you decide to purchase a few additional pieces of machinery to increase production, this will result in a permanent change in fixed overhead costs.
Variable Overhead Costs
Variable overhead costs are those that change depending on the business activity, such as sales volume. Variable costs rise as your sales rise and fall as your sales fall. Variable overhead costs, as opposed to fixed overhead costs, vary from month to month.
Here are some examples of variable overhead costs:
Maintenance of equipment.
Unless the number of workers increases or decreases with production volumes, the labor involved in the production, or direct labor, may not be a variable cost.
Semi-Variable Overhead Costs
Semi-variable overhead costs have qualities of both fixed costs and variable costs. A business may incur such costs at any time, though the exact cost will vary depending on the level of business activity.
Utilities are classified as a semi-variable expense. These costs are only fixed up to a certain level of output. For example, the office’s electricity bill is a monthly cost but varies as per the season.
Semi-variable overhead costs include:
Utilities (power and water costs).
Company vehicle expenses (i.e., gas).
Ways to Reduce Your Overhead Costs
Going paperless is a simple way to save money. Although it may not appear to be a high cost, paper and ink do add up. Instead, adopt technology such as a cloud-based system to store all of your vital corporate data online. This will save you time and money while also allowing you to keep track of details for a more extended period. In addition, going paperless is cost-effective too.
However, going digital also reduces clutter and makes it easier for business owners to stay organized. In the event of a computer or program failure, make sure you have a backup of all your documents.
Going paperless is an intelligent decision to reduce overhead costs for small businesses because of few advantages such as being environmentally friendly, easy access, and digital file system easy to organize.
Create a Systematic Purchasing Process
It's a good idea to appoint one person in the company to handle, examine, and authorize purchases so that he can see all the expenses that management plans to incur before they're paid. In addition, negotiating contracts and placing office supply orders should be the responsibility of this person.
By putting one person in charge of purchasing, that individual can devote all of their time to finding the most incredible deals. The individual in charge of purchasing should be a skilled negotiator who is not hesitant to ask for a discount. Request that your purchasing manager go shopping for better prices on the things you buy frequently. Consider rewarding your purchasing agent with a bonus if they achieve specific cost-cutting goals without sacrificing quality.
Purchasing equipment such as computers, photocopiers, and other necessities every year is a significant expenditure. As a result, leasing equipment is frequently the best option for businesses looking to reduce monthly costs. Renting or leasing equipment makes it easier to upgrade to newer versions of computers and other equipment. Additionally, while leasing, costs such as equipment repairs and maintenance will be reduced if not eliminated.
Tax benefits are frequently available for equipment leases. In addition, depending on the lease, you may be able to claim your payments as a business expense by utilizing specific legal provisions.
Leasing equipment is one of the most productive ways to reduce your overhead costs for small businesses.
Market to Your Existing Customers
Marketing to your existing customers can be a good strategy to reduce costs. This step reduces your marketing costs and shows that you care about rewarding loyalty, which gives your brand a boost.
Customers who are happy with your products or services are more inclined to tell their friends and family about them, and word of mouth is still the most effective marketing method.
Organic promotion from peers is more likely to be trusted by potential customers than paid advertising.
Choose a Business Credit Card That Suits You
Choose the best business credit card that suits you for your business expenses. Your company can benefit from credit cards in several ways. For example, Cash-back benefits, travel miles, or a point system are all available on cards targeted for corporate use.
When buying office supplies and paying for travel expenses with a credit card, these incentives can pile up quickly. First, examine the annual fees and interest rates associated with your credit card. Then, it could be time to apply for no-fee credit cards with lower interest rates.
Choose a credit card that is ideal for your company, particularly in credit limits, interest rates, and fees. This could be one of the methods to your cost-cutting.
Frequently Asked Questions:
What are typical overhead costs?
Overheads are business costs associated with the day-to-day operation of the business. Accounting fees, insurance, advertising, legal fees, interest, labor burden, rent, supplies, repairs, taxes, travel expenses, phone bills, and utilities are examples of overhead expenses.
How do you calculate overhead costs for a small business?
Divide the total overhead costs of the business in a month by the monthly sales to calculate the overhead rate. To calculate your overhead rate, multiply this figure by 100. A lower overhead rate indicates greater efficiency and profits.
Are overheads fixed costs?
Typically, overhead does not fluctuate with increases in product production, which is why it is a fixed cost. Mortgage or rent for buildings such as the corporate office are examples of fixed costs.
"name": "How to write resolutions for small businesses?",
"text": "Examine all aspects of your small business from the previous year to create a solid list of resolutions for the coming year. Consider your successes and failures and work to alleviate them."
"name": "What is a resolution for a business?",
"text": "In business, a resolution is a proposal made during a meeting of the company's shareholders or directors. It is discussed, and its approval represents an official confirmation of any action that the company will take. Resolutions are classified into four types: elective, extraordinary, unique, and ordinary."
"name": "Why should every business have a resolution?",
"text": "Resolutions help to focus your efforts and energy on new goals and reaching new heights. In addition, resolutions enable business owners to understand where they can increase efficiency and grow over the coming year."
Article | March 17, 2020
If your enterprise-level eCommerce business is reaching the point of expansion, it’s time to think about how you can scale your processes as effectively as possible. With efficiency and future growth in mind, we have a word of warning: Now is not the time to throw things at the wall to see what sticks. Instead, it’s time to buckle down and do your homework. The first step in scaling an eCommerce business is to prepare for that growth. You should be sure you have your data organized, your features lined up and your strategy set.