On a Shoestring Budget? 5 Cost Saving Tips for Your Small Business

While owning a company can be unpredictable, one thing is certain: You need a regular cash flow to survive. As a result, it’s no surprise that finances are frequently one of the key concerns of entrepreneurs. No matter how passionate you are about your small business, without financial savvy your small business will never thrive. Luckily, it’s possible to cut corners in a variety of ways. Here are tips to help your company reduce some of the hidden costs of running a business and hopefully save you a bundle.

 

Eliminate waste

When you’re running a small business, inadvertent waste can creep in over time. Examine these common areas where you might be spending more than necessary.

• Rent. Every company needs a physical location where business can be conducted. However, every company doesn’t need an office in a central or downtown location. If your expensive location doesn’t bring in any added value to your brand, try looking for an office with less expensive rent.
• Energy. Depending on the size of your utility bill, reducing your energy usage might save you significantly. Turn off extra equipment and lights. Install a programmable thermostat to reduce heating and cooling expenses. Utility costs are constantly on the rise, so these efforts can have a long-term impact.
• Supplies. With the prevalence of electronic communications, the incidence of supply waste is slowly and organically being reduced in businesses everywhere. If you haven’t gone totally paperless, start implementing a range of policies to head in that direction so that you can save a bundle on paper, printer ink, copier, and associated costs.
• Equipment. If you’re just starting out, or in need of some additional equipment, consider buying refurbished printers, copiers, phones, and computers. Another option is to lease what you need.
• Insurance. While insurance is an unavoidable expense, small business owners shouldn’t forget to review their coverage periodically. You may find that a different insurance company can offer a better rate. Also, it’s valuable to evaluate whether you’re insured against incidental losses that you could affordably cover on your own.
• Taxes. Forgetting to claim deductions on your taxes (or simply not knowing about them) can result in major overpayment. Make sure to maintain detailed expense records and consult a tax expert or accountant to assist with income taxes. It can be invaluable to saving big money every year.

 

Outsource

While having employees is crucial to getting work done, costs associated with them can amount to the largest chunk of a small business’s total budget. There are salaries to pay, offices to rent, and worker’s compensation and other insurance packages to buy. As a result, many small businesses turn to independent contractors when they need to cut costs.

In addition to saving upfront costs, small businesses also save because hiring on a per-project basis means there’s no wasted employee time when things are slow. Outsourcing also saves businesses because owners aren’t responsible for contractors’ payroll taxes or benefits. As a bonus, with the money saved on salary, small businesses can afford hire experts instead of relying on employees to wear multiple hats. While experts are great, some very small businesses may use sites like Upwork and TaskRabbit to get support for more casual projects. Some offer a project bidding process to enable business to select the most attractive offer.

 

Move data, resources, and people to the cloud

While small businesses may be resistant to embracing the cloud, doing so offers many cash-saving opportunities. There’s a big incentive to moving business resources and data to the cloud simply because of the money that can be saved on the upkeep associated with expensive hardware and data storage. Opting for cloud-based software—where a business pays on an annual basis per user—can also reduce costs associated with purchasing and upgrading software in-house.

Once a lot of a business’s resources are in the cloud, telecommuting is much easier too. And this can be a huge money-saver in terms of overhead. Even if it’s not feasible to convert all staff to a telecommuting situation, even offering that option to a few employees will save on office space and the ongoing operating costs and equipment associated with it.

 

Offer low-cost employee incentives

In order to create a highly successful business, you need to hire talented employees. However, winning top talent comes with a price. To win them over, you end up competing with large organizations that have the resources to offer expensive incentives, such as private healthcare or big bonuses. In this instance, getting creative with incentives can give you a good shot.

Flexible work and telecommuting has a lot of appeal to candidates looking to work for SMBs, especially in the digital sector. Company shares and professional development opportunities are also highly attractive to ambitious candidates. Additionally, you can offer a range of incentives that make work life more pleasant, such as the ability to ‘own’ your work, the occasional free lunch, and liberal vacation days. Whatever you spend on incentives, keep in mind that it’s an important investment in a relationship that ultimately will pay off with more profit for your business.

 

Skip advertising

Customers are increasingly resistant to traditional advertising. They fast-forward through TV commercials, tune into ad-free radio subscriptions, and skip over pre-roll video ads. Even Google Adwords, which has become pricey in recent years, can be an unnecessary budget drain for smaller companies. This new environment is great news for small businesses, which can save thousands of dollars on advertisements that might never be seen. Instead, savvy small businesses are investing in modern marketing techniques.

For many, content marketing, targeted marketing campaigns, social media, and search engine optimization (SEO) have replaced traditional advertising. At their heart, all of these marketing approaches are about providing valuable content for consumers. To get started, create a strategy. Then, start a company blog, publish an email newsletter, make videos, and take photos. Share that content via social media and other outlets. By providing something useful, you’ll forge meaningful relationships and your brand will naturally generate new business.

  

No one likes to waste money

When you’re spending extra money on unnecessary expenses, you can’t invest it in reaching new customers, expanding your territory, or improving your products. Take time to reevaluate the way you do things. Don’t just continue doing what you’ve done in the past out of habit. If you do, the effort can pay off significantly down the road.