What small business couldn’t use a little more cash and a little less financial stress? Here are several ways to cut costs now so you can focus on growing your business.
1. Know where your money is going.
The first way to save money is to know how you’re spending it. If you are not intimately acquainted with your financial reports, now is the time to get friendly. Get a list of expenses and arrange by priority, then by cost. The low-priority, high-cost items are the ones you should immediately find ways to eliminate or reduce.
2. Research your options.
That insurance plan, Internet service, or tech support you signed on for might have been the best option when you got it. Things change, however. Options appear. Got through your list of high-cost expenses and research new options that would reduce your costs. If you focus on researching one or two per week, you might find better, less-expensive options for a dozen of your highest expenses within a few months. Even if the savings on each expense are not huge, the cumulative effect of small savings on a dozen expenses adds up to big reduction in expenses.
3. Train an in-house employee to do that expensive work. If you’ve been spending a chunk of money on an outsourced professional or expensive firm, reroute that money. Get the training that an employee needs to enable him or her to do the work in-house. It’s still an initial investment in the training, but you will recover that by eliminating the ongoing expense of hiring out the work.
4. Negotiate for better terms.
Asking for a better rate, interest rate, or payment plan might just get you one. But you won’t know if you don’t ask. If you have years of service with a particular service or company, you are more likely to get better terms through negotiation. Talk to the person with the most authority, and don’t be afraid to re-open a discussion for negotiation again if you get a negative response the first time. Persistence tends to pay off.
5. Reduce the frequency of repeated services.
Look at any recurring service you pay for and determine if you could reduce the frequency. Could that weekly cleaning service become bimonthly, or the monthly business coaching move to a quarterly schedule without detriment to your business?
6. Move to the cloud.
Storing physical documents and data requires physical space. Traditional software requires expensive upgrades on a regular basis. By switching to cloud-based data storage, document sharing, and software as a service, you can reduce or eliminate your expenses. Many cloud-based services offer reasonable monthly fees which include upgrades and tech support.
7. Purchase in bulk.
For regular office supplies, inventory, or business needs, shop around for the best rates on bulk purchasing. Bulk buying can give you much better rates on daily-use items. Buying inventory at a greater quantity can give you access to the best pricing.
When you work with other small business to get the goods and services you need, you have the opportunity to barter. Bartering can benefit everyone involved by eliminating the need for cash and allowing both parties to swap things they have in ready supply. You can offer your service or good in exchange for another service or good. Establish a value-for-value rate: XYZ service is worth $100, so I can exchange it to you for $100 worth of ABC product.
Saving money is about awareness as much as anything else. If you make it a regular habit to review your expenses and research your best options, you will build the practice of saving money into your business.