All successful businesses do their best to save money, improve efficiency, and increase profits when and wherever possible. This is especially necessary for small businesses on a tight budget. While there are numerous ways to save money, these eight cost-saving measures are among the easiest to implement:
1. Bargain
Bargaining with vendors is one way to save money. Examples are working out deals to buy or sell merchandise in the off-season for less, getting quantity discounts, or discounts for paying your bills early.
2. Get Creative with Credit
Does your company credit card (or personal credit card used for company expenses) have a high interest rate? Even if you have intentions of paying down the balance quickly, sometimes it just doesn’t happen, and you pay 18% – 29% interest. Get creative by transferring balances to cards with lower balances or consolidate debt into a low-interest bank loan – which frees your credit up just if you need it.
3. Take Payments Up Front
If you extend credit to your customers, consider getting a percentage of the sale up front. When customers put down 20% and pay the rest over the next 30 days, you obtain better cash flow and cut the need to use your credit card or line of credit to finance your operations.
4. Lease Instead of Buying
If your business needs office equipment, leasing may be a more cost-effective option than buying. Many leases cover the expenses of repair when the equipment breaks – and if you use high-tech machinery, it could cost you more to buy.
5. Live in The Cloud
Running your business “in the cloud” can save you money on local servers and IT costs and help transition to a paperless office easier. Although the era of the truly paperless office took a lot longer to materialize than most people thought, cloud-based storage systems are now a safer, easier way to manage your business. Operating in the cloud can also make your business more mobile and reduce the cost of rent and utilities for your office space.
6. Rethink Your Bank
Just because you’ve been with the same bank for years doesn’t mean you have to stay with them. Other banks may offer you a better deal on loans, checking, fees, and other charges – especially if you have both business and personal accounts at the same bank or create other opportunities such as discounts for employees who open accounts there. One warning, don’t close your account before advising your current bank about your possible move. You’d be surprised at how fast they’ll meet or beat competitors to keep you as a customer.
7. Manage Your Risk
Although no business owner wants or expects to be sued, small businesses are often the subject of lawsuits. A business law attorney can help build a risk mitigation plan that involves contracts, business structure and insurance.
8. Consult with Your Employees
Asking your employees for their opinions on how to save money can be enlightening. From ordering supplies in bulk to replacing the fancy (and expensive) holiday party with a much cheaper luncheon followed by the rest of the afternoon off (which you’ll discover most employees would rather have…), you will not only save money but also make employees feel like valued team members.
Business owners like you can shave expenses when necessary. Although you sometimes have to dig deep, using these simple cost-saving measures can make a difference. Hiring a business consultant to check your operations is also an option and can save you more money eventually. Call us to learn how we can help you manage risk and run your business better.
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