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  • Effie Zahos
    Smarter Writer

    Effie Zahos is editor of Money magazine and has over 22 years' experience in the finance industry.

    Effie Zahos
    Smarter Writer

    Effie Zahos is editor of Money magazine and has over 22 years' experience in the finance industry.

    New gear is expensive, but with a little planning you could meet the cost of your own innovations.

    Last year up to one in three businesses invested in new computer equipment. If you’re wondering how your cash flow would allow this, you’re not alone.

    The Australian government has put innovation high on its agenda, but unfortunately for many small business owners, business costs can be the biggest barrier to innovation.

    A close up photo of a woman rifling through a folder of tax documents.

    Plug the cash flow

    Cutting costs may be the quickest and easiest way to find immediate savings, which you could then feed back to your business. It may help to go over all your expenses, ranking them from highest to lowest, and then identifying what you can change.

    For instance, why not share resources with other SMEs? Tech expert Joseph Hanlon from WhistleOut says there are plenty of savings to be made on your phone bills with data-sharing plans that major telcos are offering. 

     

    Consider your needs

    Coverage and reliability are big considerations for a small business, but the solution will differ based on how your business operates.For example, is it really necessary to buy everyone in your team a new phone? Hanlon says it’s not unreasonable for your employees to use their own phones and the business pay only for the service.Saving money on fixed-line broadband also comes down to your business requirements.Businesses that need to upload a lot of data should consider an SHDSL (symmetrical high-speed digital subscriber line) connection – with guaranteed upload and download speeds. “SHDSL is expensive, but is a necessity where uploading huge chunks of data is business-critical,” says Hanlon.

    Put your money to work

    With the cash rate at a record low, high interest savings accounts and term deposit accounts have taken a hit.

    For short-term saving goals, a business savings account, notice account or term deposit may be a better place to stash your cash than a transaction account.

    Bessie Hassan from finder.com.au suggests that the best rates are often found in online accounts.

    “Currently, the Bank of Queensland Business WebSavings Account offers a return of 2.75 per cent for the first four months, which then drops to 1.7 per cent*,” Hassan says.

    As for good notice bank accounts – a combination of savings account and term deposit – Hassan’s pick is RaboDirect’s Business Saver 90, which  offers 2.75 per cent* interest on balances up to $250,000 and has a 90-day delay on accessing funds.

    For term deposits, Sally Tindall from ratecity.com.au says the best way to get the top rate is to negotiate the advertised rate, but often you will need a deposit of at least $20,000 for bargaining power. See the RateCity table below for Tindall’s top picks.

    There are plenty of savings to be made on your phone bills

    - Joseph Hanlon, WhistleOut

    Get your peers to help

    If you’re looking for a more immediate cash injection, Tindall suggests crowdfunding. In short, you post your business idea online and if people want to help you achieve your goal, they can donate money.

    To encourage support, you can offer incentives and rewards based on the amount they donate. More details can be found on business.gov.au.

    The federal government is proposing legislation that will encourage people to invest in companies with $5 million or less in turnover and $5 million or less in assets, allowing them to raise up to $5 million in any year. It is currently before parliament.  

    Are you planning to grow your business?

    Read about The Importance Of Scalability and why adaptability is key.

    Find out moreAre you planning to grow your business?

    Disclaimer: The information provided here is the view of the author and not Telstra Corporation. We recommend you seek your own independent professional advice before making any purchase/finance decisions.

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