Small business owners face the challenge of being their bosses, with little or no investment capital and with small profit margins. Therefore, most of them have a lot on their plates: finding the time and money to grow their businesses, keeping their employees happy, and trying to balance the demands of home and work life can all be difficult at times. But one thing that almost every small business owner can agree on is that the best way to save money is to expand their business. By taking on more work, they still can earn more money and free up more time to spend on the things that matter most to them. However, this doesn’t mean that they have to sacrifice quality or take on more than they are able to handle.
In this article, we’ll cover a few ways you can save money while still providing the high-quality service your customers expect.
6 Cost-Saving Ideas
It’s easy to get wrapped up in the day-to-day responsibilities of running a small business. But sometimes, it’s important to step back and consider the big picture. As you consider the big picture, ask yourself: Which of my expenses are necessary to keep my business running at peak efficiency? Which expenses are just luxuries that I could do without if I really wanted to?
So, here are ten ways to save money while still providing the same level of service and quality your customers have come to expect. We’ll look at ways to reduce your overhead costs, find ways to save on labor and materials and discover several ways to generate extra income.
- Switch Banks
Banks are always looking for ways to make more money, and the recent regulatory changes have forced them to get creative with fees. One way to avoid costly fees is to take measures like using another bank’s ATM, avoiding bounced checks, and steering clear of debit card fees. If the savings from making these changes are significant, it may be in your company’s best interests to make the switch.
- Familiarize Yourself with Free Tools and Apps
You’re going to need a lot of money as a small business owner. You’ll need to pay employees, buy supplies, and cover the costs of running your business. But as you grow, you’ll realize that you can save money in a few different ways. Instead of buying products you don’t need, you can find free tools and apps to do the same work. There are a lot of popular apps and tools that can help you in many ways. For example, you can find and download free apps that create free professional-looking logos as well as social media assets. As a small business owner, you can do this without having any design experience. Other apps can help you browse and download free high-quality images for your website and social media use with free commercial rights. There are also many accounting, payroll, and invoicing services with free trials and low plans per month.
- Don’t Skip Financial Planning
The first step to achieving your financial goals is writing them down. This may seem like an obvious step, but many first-time entrepreneurs find the process of creating a financial plan too overwhelming or unnecessary in the early days. If you’re tempted to do the same, think about it again. All your financial costs like paystubs of your employees, payroll data, any other expenses like taxes and even much more should be analyzed and planned before you face any financial issues.
Creating a financial plan is important for anyone, regardless of their profession. It allows you to take stock of your current situation, where you want to be in the future, and how you will get there. Having a financial plan will also help you make better decisions in a hurry, and keep you focused on your overall goals when you feel overwhelmed by the day-to-day aspects of entrepreneurship.
- Understand Your Tax Obligations
Between the paperwork, the accounting, and the accounting mistakes, it can feel like there’s not much leftover. But just because you can’t save the world doesn’t mean you can’t save your money. There are many tax strategies including FBAR you can use to save a little extra each year. One of the most stressful aspects of running your own company is keeping an eye on your finances. It’s easy to go over budget if you’re not careful, especially when you’re starting out and don’t have a lot of cash on hand to work with.
- Find home-based business deductions
Try to arrange your home-based office first. The first step to saving money as a small business owner is to recognize your office as a tax deduction. If you run your business out of your home, you can deduct a portion of your utilities, Internet and phone bills, and even a portion of your rent or mortgage payments. You can also deduct a portion of your insurance and other expenses related to your home offices, such as maintenance and cleaning services. By finding ways to make your home office more efficient and saving on your operating expenses, you can increase the amount of money you’re saving by taking advantage of this tax deduction. There are a number of home-related expenses you may be able to deduct, such as heat, electricity, and other home maintenance. For example, the cost of painting your house or fixing the roof may be deductible. Be sure to check with a tax professional to see if you qualify for these deductions.
- Employ a Family Member
With so much going on, it can be hard to keep your business on track. One of the best ways to save some much-needed cash is to employ a family member. In the U.S., small businesses are permitted to hire family members for income-tax purposes. This is a great way to cut down on expenses and increase your profit.
- Hold onto our business receipts
Often, small business owners find themselves in the red because they failed to take the time to hold onto the receipts for their business expenses. In many cases, it’s possible to deduct expenses even if you didn’t get a receipt at the time of purchase. For example, small costs, like parking fees and coffee, can add up over time. If you keep your receipts, these costs can be written off as business expenses. Among other ideas that reduce your expenses are:
- Buying generic or used items
- Usage of blanket orders for consumable products
- Reducing paper consumption
- Encouraging energy efficiency in your office
- Keep Marketing Budget Low
When you run your own small business, it can feel like the world is depending on you. You want to provide the best products or services possible, and that means investing heavily in marketing and other expenses to keep the business growing. But while it’s important to invest in your business, you also need to be frugal. Even small amounts of money can make a big difference when it comes to saving and growing your business. Check that you’ve covered the following bases before running any sophisticated campaigns:
- Optimize your website for sales
Put your best foot forward on your homepage. Showcase your best deals and discounts. If you have a brick-and-mortar location, display it on your website to get more offline traffic. If you sell online, feature a few high-value products. The more time and money you can save on-site optimization and marketing, the more you can put toward expanding your business or investing in other ventures. So, your website can turn into the right sales channels in place, you can increase your revenue significantly. That means being able to grow your small business without adding more employees. But to do that, your website needs to be optimized. That means making sure that it’s easy for potential customers to find your products and services.
- Get to know micro-influencers in your niche
Micro-influencers have the ability to reach and influence a much smaller audience than a traditional influencer, but with the same ability to drive action. They’re people like you and me with a following of a few hundred or a few thousand people. We’re not looking to build a large audience; we just want to save money.
- Reward Loyalty
When you’re a small business owner, rewarding your customers for their loyalty can be tricky. You want to offer them something cost-effective to you and meaningful to them, so they’ll keep coming back. One option is to offer special rewards to your most loyal customers, like a 10% discount or a free item after they’ve spent a certain amount of money. Another option is to offer rewards for referring new customers, such as a free item or a discount on their purchase.
- Choose the right social media channels for your brand
If you’re like most small business owners, you probably have a presence on social media. But is it used to its full potential? In order to use social media to its fullest potential, you need to choose the channels that are the best fit for your brand. For example, if you run a retail store, Facebook and Instagram are a great fit, since they allow you to post photos of your products and interact with customers. Try to be selective and don’t protect your energy and don’t apply to all platforms at once.
- Cross-promote with complementary brands
The best way to save money while growing your business is to cross-promote with complementary brands. In other words, promote products that are similar to yours but that also offer discounts, promotions, and other perks to entice customers. The easiest way to find complementary brands is to research the top-performing small businesses in your niche. Then, target those businesses with your promotions.
- Understand Your Shipping Strategy
If you ship your products, then you might know that small businesses have been struggling to keep up with competition ever since free shipping became the norm. Larger companies with high shipping volumes can negotiate better rates with carriers, while small businesses with lower shipping volumes have no bargaining power. This leaves small businesses struggling to offer affordable shipping to their customers. Shipping cost is a major factor to consider when starting an online business. You need to ask yourself how you will handle shipping costs: will you pass the full cost of shipping on to your customers, charge a flat rate, or absorb the shipping cost yourself? You also need to decide if you will use free carrier-provided packaging or branded packaging. If you are shipping internationally, you will also need to consider insurance and tracking.
By knowing at least some of these cost-saving ideas you can reduce your small business costs significantly. Depending on the type of your business you can apply them all or partly. The most important is to take actions and start reducing costs along with your financial planning. We hope that everything will work out for you!