25 Jul 5 Practical Strategies for Saving Money on Small Business Expenses
We all know that successfully managing your expenses can make or break your small business. In fact, as a responsible business owner, you’ve probably already started thinking about ways to keep your costs down. Finding feasible cost saving ideas for companies is a task that’s been around for as long as businesses have. The key is knowing what you can do today to save on your overall costs in the future.
Try these practical tips to not only save big, but improve your overall business.
1. Partner With Other Companies
Two is often better than one. And when it comes to saving money, pairing your business with other (potentially more established) businesses can be an invaluable resource that saves you money. Especially when it comes to advertising and promotion. Making these alliances not only puts you in a position to gain more exposure, it also allows each involved party to save some cash along the way. Try partnering up with similar businesses to save on these areas of spending:
- Share Advertising: Is there another company that has it in their best interest to promote your business? If you’re serving the same community, you may find it helpful to jointly promote events. You can also share advertising and promotional costs and start looking at opportunities to share mailing lists and distribution channels (even online software).
- Equipment and Supplies: As a small business, there may be ways to save on buying the equipment you need for your business. Try your hand at forming buying alliances with other businesses so you can benefit from lower prices, while still having the equipment and supplies you need. You can also reap the rewards of getting purchasing discounts for larger quantities when you buddy up!
- Travel and Insurance: Alliances are also great for travel and insurance expenses. Not only can you benefit from purchases (such as the necessary travel supplies) but you can find discounts for hotel bookings, car rentals, and travel insurance, when you book for more than one person.
If you’re not sure where to get started, and simply want to join an already-existing association, a simple web search can help you find some industry relevant ones, which may be in your area. You can also find associations to join by reading trade magazines, going to events (such as fairs) or even just reaching out and asking other businesses in your industry through networking sites like LinkedIn.
While joining may cost a small fee, the overall benefits can far outweigh the cost. Associations such as FoundersCard, include benefits ranging from discounts on travel to business services, and may even include coverage for some areas such as prescriptions and phone services.
2. Conserve Your Resources
You’ve probably thought about conserving resources in your personal life – it’s the reason you walk around your house turning lights off when not in use, and why you turn the water off when you’re brushing your teeth. But have you ever thought about having this mindset for running your business? Start things off by using these cost saving ideas for companies:
Going paperless has become a staple for many small businesses. If your business has yet to make the leap, it’s time to jump onboard. Not only does going paperless keep paperwork loads in check, it also saves on your overall storage and document management costs.
Here are some tips for going paperless:
1. Start by scanning and emailing documents, rather than mailing them. You’ll save a lot of time and money that would have been spent on postage and trips to the post office.
2. Next step is to limit the number of documents you need to print. This will not only save you time, but it will also save on storage costs.
3. Another great idea is for your business to send invoices to clients electronically. Sending electronic invoices saves on additional costs of printing and mailing, and you’ll have the added benefit of instantly delivering your documents.
As the years go on, and technology gets more advanced, it’s a great idea to use the technological resources out there to make your business more efficient. From scheduling meetings to paying your employees, there are many low cost (or free) resources available. For more helpful tips on where to get started, check out our post, 5 Things You Need To Automate This Year.
3. Stretch Your Budget With Bartering
You may think that bartering is something from the past, but far from being a dead practice. While bartering might be one of the oldest forms of trading goods, it is still very much alive and well. Don’t miss out by overlooking these opportunities!
Not only can bartering allow you to avoid cash outlays while capitalizing on slow-moving services, it can also help you get the supplies you need when you don’t have the capital to front the cost. For example, if you’re looking for someone to work on photography for your website, try exchanging your services or products with a photographer who may be in need of what you have to offer.
If you’re not thrilled about the idea of bartering with other businesses directly, you can hire a commissioned barter broker (or find an intermediary site such as Barter Brokers) or join a commercial exchange.
As a good starting point, you can check out The National Association of Trade Exchanges (NATE) which is a clearinghouse for member exchanges across the country. By becoming a member, you receive “trade dollars” for your goods and services, which can then be used nationwide. This site allows business owners to swap just about anything with anyone, but before you venture into bartering, here are some tips to consider:
- Barter In Your Comfort Zone: Don’t go overboard. Only barter what you feel comfortable with, financially.
A great way of doing this is to put a limit on the value of services (for example, if the value of something is over $1,000 it’s a no-go).
- Prioritize: This one’s simple: if your business doesn’t need it – pass on it.
- Do Your Research On Trade Partners: As with any kind of financial transaction, it’s important to know who you’re working with and that they’re a trustworthy source. Only enter trade agreements with established contacts, which you’ve personally done business with, or who you’re confident will carry through their side of the barter. As a general rule, stay away from businesses you just met, who don’t have the accountability of an online association to back them.
- One Step At A Time: It’s important to establish trust and credibility with the businesses you’re working with, so make sure that they’re completing agreements before extending further agreements to them.
- Get It In Writing: As you should with most financial agreements, make sure you get your bartering terms and conditions in writing
- Check The Laws: It’s always a good idea to double check the laws and regulations around bartering. Check online for the current IRS rules and feel free to speak with an accountant at SimpleKeep about how to report bartering deals.
4. Excel at Customer Service
Here’s the deal. One of the best ways for you to save money, for your business, is to avoid situations where you’d have to pay it out in the first place.
Research has shown that two thirds of consumers would rather pay more for a company that has great customer service than purchasing from the alternative. That same research study showed that about 50% of customers chose not to conduct business or make a purchase based off of poor customer service and 62% of consumers stopped doing business entirely, based off of poor customer service. So, step up to the plate!
Your customers will keep returning—not to mention telling their friends about your business— if you invest the time and energy into excelling at customer service. Keeping customers reduces marketing expenses, by capitalizing on the fact that it’s easier and cheaper to sell to current, satisfied customers. And customer service doesn’t cost you anything at all!
Another advantage to having fantastic customer service is that you can avoid small problems growing into larger ones. This is especially poignant when it comes to lawsuits, or even just arbitration. Avoid getting problems worked up to that size by paying attention to the little details—always respond to written and phone complaints and you’ll save yourself from headaches down the road.
5. Even More Cost-Saving Tips For Companies
Learn Something, Save Something:
Rather than immediately writing something off for someone else to do, be smart about how you invest your money the first time. For instance, if you don’t know how to write a press release, why not hire someone to teach you how to write one, so you have that skill for the future, rather than hiring someone to do it for you each time. Time may be a factor, but if it’s something you can do yourself, in a shorter amount of time, it may be worth it.
Get The Word Out There:
Representation of your business starts, first and foremost, with you! Make sure you’re getting the word out there, tucking coupons in customers bags, striking up conversations and sending out email newsletters. Coming up with a customer acquisition strategy may take time, but it will be well worth the effort, in the end.