Ways to Save Money as a Business OwnerWritten by Mindaugas on June 03, 2019
Running a venture can be an expensive endeavor though not many entrepreneurs have the luxury of accessing bottomless budgets at a moments notice. While operating on a shoe-string budget, you may need to come up with nifty ways to save money as a business owner.
Fact of the matter is that with a little ingenuity and by straying away from unnecessary expenditures, you can really put a dent into your overhead expenses. All this doesn’t have to come at the expense of quality or customer service that your consumers have come to expect from you.
The tips I am about to share with you are not industry specific and can be applied by almost any business. No matter the location, or what your business entails, chances are there are ways to trim the fat off of your operations and save money.
Buy Used Equipment
One thing that a lot of businesses tend to overlook, is the possible savings that come with used equipment. There is no need to splurge on brand new furniture or gadgets. You have the ability to be just as productive at a fraction of the cost by acquiring second-hand supplies.
Look for reliable, licensed re-sellers in your area that can fill the equipment void, rather than forking over big bucks on shinny new gear. Sources claim that it’s possible to save over 50% when choosing used over new equipment – depending on your business operations, that’s a substantial deal.
Forgo that Office Space
Possibly one of the biggest business related expenses is leasing and maintaining an office space. Many entrepreneurs are actually better off without an expensive office, and could incur massive savings by running their operations from home or a co-working space.
With internet at your fingertips, many essential business functions can be performed virtually anywhere. If you ever need to conduct meetings with employees or clients, it can all be done with the help of online conferencing, or a temporary co-working office.
Telecommuting and Remote Workers
Remote workers and telecommuting may not always be possible – will vary from business to business – but if it is, I suggest you embrace it. As I previously mentioned, this can negate the need for an expensive office space all the while nullifying commute times.
Remote teams boast incredible productivity all the while reducing carbon emissions. Research has shown that in the United States alone, if 32 million people who are able to work from home did so, it would save over 280 million liters of gasoline annually. When it comes to productivity, remote workers are more productive and are able to enjoy a better work-life balance than their counterparts locked away in the office.
You have variety of online tools at your disposal that can help fortify workflow even when your employees are in a different locale. This may reduce any anxiety associated with managing telecommuters and overseeing productivity.
Hire Recent College Graduates
Experience is an expensive commodity that may not always transfer into worthwhile results. Try to look for recent college graduates to fill the ranks within your company. This has the potential to save you considerable amount of money in the long run.
Colleges and universities around the world hold career days – see if you can use this to your advantage. Explore the campus, talk to potential recruits and see if any prospects are able to fulfill your needs.
Younger people also tend to grasp technology and new trends quickly. Since businesses are becoming increasingly dependent on technology, young colleagues are likely to be more tech-savvy and may be able to propose innovative business solutions.
Cross-Train Your Employees
Cost savings can also arise from developing a more capable employee. What I mean by that is rather than searching for new employees that possess certain competencies, you can train your existing workforce.
Cross-training may mean additional responsibilities bestowed upon employees which can reduce monotony for the worker, all the while saving your business money.
Focus on Retention
Retaining your employees as well is your customers can greatly reduce your business expenses. It is well-known fact that to hire and train a new employee, as well as acquiring a new customer can be expensive. It’s in your best interest to focus on retaining quality employees you have managed to round up and to cultivate customer loyalty.
Invoke the Help of a Freelancer
You don’t always need to have a full-time employee on payroll to get the necessary work done. Freelancers and independent contractors can be called upon on per-project basis.
Tasks such as content writing, web development, accounting, social media management can be outsourced. This way you can minimize your payroll expenses and reduce your own workload.
Know Available Tax Deductions
Take some time to get acquainted with the tax law in your area. Home-based businesses can take advantage of generous tax write-offs that will leave more money in your bank account after the big brother takes a cut.
Many countries in North America and throughout Europe offer favorable conditions for small businesses that are run from home. If you took my previous suggestion and avoided leasing an office, this may be something worth looking into.
United States and many other countries offer tax deductions on home-based offices. In the United States for example, you are able to claim up to $5 per square foot of working space as a tax deduction – the space needs to be used exclusively for work related matters. This is a great incentive to have a home office, as this tax write-off can put a dent in your various expenses including your mortgage payment.
Negotiate With Your Suppliers
Look over your accounts payable to your suppliers and vendors. Depending on the relationship you have managed to build, you could try and renegotiate your prices – this is especially relevant if you have a long-standing relationship. It doesn’t hurt to ask about potential discounted rates or offers for long-term business partners.
Some suppliers also offer rewards for covering any debts before the deadline comes around. If your finances allow you to, be prompt with your payments and continue to grace your supplier with timely reimbursement.
Remember, even the smallest savings can add up overtime.
Meetings are oftentimes over-utilized and can become redundant. Don’t turn a simple email into an hour long event that takes everyone’s attention off the task at hand.
Go over your calendar one time – right now – and see how many meetings you have planned for the near future. Evaluate just how vital they are to your overall progress and see if any of them can be adjourned.
A study conducted by Harvard Business Review has come to some shocking conclusions regarding meetings and their results – or lack there of. Out of 182 business managers that were surveyed:
- 65% of them said that meetings have kept them from completing their own work;
- 71% said that meetings were inefficient and unproductive;
- 64% claimed that meetings come at the expense of deep thinking;
- 62% of business managers said that meetings fail to bring the team closer together.
Try to limit your meetings to critical business updates and events that require a more hands-on interaction with everyone involved.
Utilize Technology to Your Advantage
We live in the age of technology – it’s inescapable and surrounds us on a daily basis. I’d wager that a business which doesn’t invoke the help of technology in their operations won’t last long. After all why would anyone not take advantage of tech which can make any entity more formidable in the highly competitive business environment.
Automation, business intelligence, customer relation management platforms, and variety of other online tools are available that fortify a venture and reduce operating costs. These are technological aids which can have a significant influence on the success of your business and any incurred expenses.
Be Smart With Your Marketing
Marketing today isn’t only about a big wallet and ones ability to throw money at anything that hints at potential exposure – marketing can be successful with only a bit of creativity and persistence.
You have the ability to leave a long-lasting impression of your business without breaking the bank. For example guerrilla marketing and inbound marketing are some of the possible tactics you can incorporate to promote your business with minimal resources. You can even inquire your local media outlet (TV or radio) about a possible promotional bit – remember that the answer is always ‘no’ until you ask.
Perhaps in the beginning you may need to invest some time to broaden your horizons on marketing. Read some books, absorb all the knowledge you can on how to handle PR and marketing in general. This initial time investment can pay off big-time in the long run since you’ll be able to achieve results without relying on expensive marketing agencies or additional staff.
In the End
Success doesn’t solely rest the resources you have available; success can be generated through ingenuity and careful planning. Be more hands on with your business development, learn new skills and foster a frugal mentality within your organization. This approach may even carry over to your personal life leading to additional savings even outside of your business.