Every small entrepreneur looks for bringing in more business, making more profit and controlling the expenses. Small businesses should be very specific regarding saving money.
If you are also a small entrepreneur and looking for ways to save money then have a look at 15 Best Cost Cutting Tips for Small Businesses and improve your baseline.
1. Review all expenses, even the smaller ones:
You can’t manage things which you don’t track. If you’re not keeping a record of all of your expenses, you ought to begin doing it without delay. There are many accounting software available in the market which can help you categorize expenses and help you take measures to reduce them.
Once you start this at the end of the month you will find some unnecessary expenses which can be avoided.
2. Office Space Costs:
It’s always recommended to rent or buy the place according to your needs and make efficient use of the available area to set up an office. It shouldn’t look untidy, and another side it shouldn’t be very big with a lot of unused space.
Better yet, if you don’t really require to run your business from commercial premises why not choose Virtual Office Space or you can also operate from your home. In addition operating your business from home can save you money on insurance, business taxes, and utilities.
3. Go Paperless:
Whether the invoices need to be sent, or you need to keep records, the expense of paper and ink seems very nominal at times, but at the end, it can add up to a large business expense. Unless it’s absolutely necessary please go with paperless by not printing. All the tasks like invoice and bill payment system and filing paperwork can easily be done with the help of a computer instead of physical paper and at the end of it will result in lower printing & storage costs.
4. Don’t Buy any Supplies in the Bulk :
While buying in bulk may save a significant amount of money because it seems less expensive. But, this may be a good idea for large enterprises and may not be good for small businesses. Often, small businesses have limited consumption, and thus, they should only buy supplies as per their current need.
As a small entrepreneur, you could greatly reduce the cost by buying only what you need today – not what you think you’ll need tomorrow.
5. Buy used or refurbished equipment:
Buying brand new, retail-priced equipment is a big business expense. You can reduce the cost by buying refurbished furniture and other computer equipment that is usually as good as the brand new variety but offered by manufacturers at a discounted price. In today’s market, you can also prefer well condition used equipment
6. Use open-source software:
If you can manage and start using the open-source Software and tools then you can save a substantial amount of money. For Example- instead of Microsoft office you can you use another open-source office such as LibreOffice, as well as instead of Microsoft Windows you can use the Ubuntu OS by which you can save the license cost. Similarly, you can get a lot of open software like CRM, Document management, etc.
7. Use Technology and Save travel Expenses:
Technology allows us to save money as using the latest technology, you can save a lot on travel expenses that weren’t possible even five years ago. Next time if you have a meeting with your client in another city, request them for VC with the help of tools like Skype, Microsoft teams, etc. We can understand that a first meeting is very important and needs be done face-to-face but all follow-up meetings can be done virtually.
There are many ways by which you can reduce business costs with the help of technology such as interviews, training, technical support can also be given with the help of remote support applications like Team Viewer, etc.
8. Reduce the Use of landline phones:
Ideally, telephone lines can be expensive and sometimes needless business costs. If you are one of those businesses that still using landlines, it’s time to rethink.
Small entrepreneurs who switch over to use cell phones, VoIP and virtual phone lines instead of a traditional landline can save their business costs.
9. Cut traditional advertising in favor of low-cost Digital advertising:
Traditional advertising platforms such as buying print or TV Ads and putting up hoardings can get very expensive day by day. In view of this explore new platforms like Google AdWords & Facebook Ads to advertise which can help you to get high-result, with very minimal business costs. By digital marketing, you can target users from a specific city, age-group and demographics which is not possible with traditional advertising.
10. Go with rental solutions instead of buying your own:
There are many companies in the market which provide the rental solution and fulfill your all business requirements such as all IT equipment (Printer, desktop, laptop, servers).
Going with a rental solution you may get below benefits:
- Benefits In Tax – Cost of renting can be shown under business expenses.
- No Maintenance Cost – if you go with rental service then there is no maintenance as it is totally a part of the service provider hence saves AMC Cost.
- Business Flexibility – With renting option you are flexible as you can expand your business anytime and according to your new need, you can plan of rental equipment without investing money on purchases.
- The vast range of products: With a rental option, you have multi-option with the vast range of products and you can hire according to your needs.
11. Use Energy Efficient Equipment:
One of the major and biggest expenses is energy and utility bills which need to be taken care of by every entrepreneur. Instead of conventional electronic equipment, if you start using energy-efficient counterparts then you can save a good amount of money. For example – instead of CFL please use LED lights.
12. Taxes management:
Tax filing is one of the major stressful times of the year for a small business owner. You can reduce your stress by adopting good accounting software which can help you to save a lot of time and energy. Make sure your accountant gives you the best advice as the combination of a good accountant and good accounting software can help you to save a lot of money.
13. Monitor Employee performance and hire smart people:
Many of the companies now hire fresh college grads and then train them for a month or two. It came out to be very cost-effective instead of hiring an experienced person. For critical work scenarios, you may have no option and you should go for experienced people.
You should also set performance metrics for all the employees where you can monitor employee performance, and at that point of time, an action can be taken against non-performer.
14. Hire Interns:
One of the major cost for any business is the payment of employee salary and benefits. You can hire some smart interns to manage the tasks effectively instead
15.Reward your profit-makers:
It may sound a bit contradicting, but you should reward your profit maker whether it’s your employee or it’s your customer as sometimes a small reward gives us good returns. You can start by making small gestures, like an occasional free gift or a treat, to boost employee morale and keep the work environment positive.
It could also mean offering bonuses to employees who fulfill their targets as it encourages them towards more and effective work. You should also be spending a little money on the customer who does the work for you by simply investing in a relationship that will ultimately bring more profit to your business.