Five Simple Ways to Save Money at Your Small Business
When it comes to successfully managing a business, knowing how to cut costs and save money for turbulent times is an extremely useful skill for entrepreneurs. Check out this article for some useful tips on how to free up some much-needed capital.
Many small businesses fail because they don’t have an emergency fund to sustain them during times when clients are hard to come by. Lack of experience and insufficient money are the main reasons why small businesses sink. In order to avoid this situation, small business owners should develop healthy financial habits early on. Saving cash by avoiding frivolous expenses is mandatory if you want your business to succeed in these uncertain economic times. Constructing an emergency fund can keep you safe during hardship.
Keeping close track of your spending will enable you to gain a clear picture of the financial position of your company. Make sure you use separate bank and credit card accounts for business and personal expenses – it will make it easier to keep track of all the deductible expenses. Hire a reliable accountant to help you sort through your finances. Doing the accounting yourself may save you a few bucks, but it’s not efficient in the long run; a trusted professional will be able to find more deductions and lend a helping hand when taxes are due.
Budgeting is extremely important for a small business, and will help you plan your finances accordingly. Set aside half an hour every week to organize your finances, see where you stand and make sure you are well within your budget. This will help you make informed financial decisions, gain more insight into your business operations, and get you one step closer to finally to saving capital.
Creating an emergency fund to keep you going when the unexpected occurs isn’t as difficult as you may think. By constantly looking for smart ways to cut down your expenses, you will be able to save cash that will come in handy during difficult times. Here are a few ideas to get you started.
Office space #
Figure out if you need an office to conduct business activities. If you have frequent meetings with clients, or need proper space to develop your product, an office is essential. On the other hand, if most of your business activities take place online, allowing your employees to work remotely may be a wiser idea. You could rent a conference room whenever you need to hold an important meeting and video-conference the rest of the time. A remote team is not as hard to handle as you might think – advances in technology allow you to keep a close eye on your staff and make sure they are productive and motivated.
If the office is necessary, then look for ways to reduce the cost of organizing. You can buy used furniture online and use energy-efficient fixtures. When it comes to software, keep an eye on sites like FatWallet and DealCatcher, which offer discounts on products and services. Also, consider switching to Linux instead of purchasing Windows licenses for all your employees.
Advertising can get really expensive, so knowing how to cut costs in this department will go a long way. Start by figuring out exactly where you can reach your target audience. If they spend most of their time online, you’re in luck – you’ll pay out less to promote your business online than you would for traditional advertising. Setting up a Twitter and Facebook account for your small business is free, and running a few effective campaigns with social media and on search engines will return good results.
If you have to resort to traditional advertising, your budget can evaporate quickly, so be creative. Instead of running an ad on television, consider making a special TV appearance. Local stations usually have reasonable advertising rates throughout the day and night. If you have your eye on a big billboard and can’t afford the cost, split it with neighboring businesses. Instead of running an ad in the local paper, offer to write a free column about your field – it will make you look like an expert and increase people’s interest in your business.
Save on banking fees #
Small businesses spend a fortune each year on banking fees. Look for a financial institution that offers you free or low-cost checking. Don’t limit your search at banks; a credit union may prove more suitable for your needs.
Also, pay attention to how you use your credit cards. If you spend a lot on certain types of products, like office supplies, find a credit card that caters specifically to your needs. These type of cards offer cash back rewards on common business expenses.
You need a strong team at your back if you want to make it in the business world. However, sometimes outsourcing makes more sense. For instance, it can be more cost-effective to contract an outside firm to handle your IT needs instead of hiring a full-time employee who only works when there’s an issue with your hardware.
On the same note, consider hiring freelancers to help you with certain projects. There are a lot of freelance workers that are highly skilled and charge reasonable prices; look for them on sites like oDesk and Elance. Hiring interns or temp employees during busy periods can also be cheaper than keeping on full-time employees you might not necessarily need on a regular basis.
Barter your services #
A great idea for cutting costs is to offer your services in exchange of those from another company. For example, if you are running a design start-up and need legal advice, reach out to a lawyer’s office and offer to design his website in return for consultation. Start by asking around and checking social networks or websites like Craigslist. You can also check out U-Exchange and TradeBank – these sites specialize in helping small businesses get what they need without spending too much.
Cutting expenses means more profit for your small business and the opportunity to put together a substantial emergency fund to help you weather adversity. This will allow you to keep going even when you hit a rough patch. Frugal spending habits make for a thriving company, especially in the current economy.