If you think you’ve tried everything to cut costs for your small business, think again. There may be a few money saving tricks up your sleeve yet.
When running a small business, keeping costs down while maximizing profit is easier said than done. Cut too much from your budget and you’ll sacrifice quality; spend too much and you won’t have cash on hand to cover critical expenses.
There are some clear ways that you can reduce your overheads—and some of the typical suggestions are so obvious, you’ve probably already thought of them. Hire fewer employees? Offer fewer benefits? Reduce operating hours? Either you’ve already tried these ideas or you’re not willing to sacrifice such pillars of company morale.
If you’re looking for tips on how to boost your small business’ bottom line, look no further. Here are 11 sneaky ways you can save money, starting this year:
Invest in tax software
All too often, small businesses attempt to save money by forgoing paying for software that can make their lives easier. Cloud-based tax software is the perfect example of this ill-conceived notion. About 20% of paper tax returns have some kind of error which can lead to companies overpaying their taxes, or which triggers an audit. Electronically filed returns have an error only 1% of the time, by comparison. And unless your business taxes are incredibly complicated, you probably don’t need to hire a full-fledged accountant.
It’s never too late to start using tax software. The sooner you start keeping track of your finances on the cloud, the easier it will be for you to report and file come next tax season.
Get your hands on low-cost, or free, financing
Access to capital, or a lack thereof, can make or break a small business, particularly in the early years. Unfortunately, newer businesses also have a difficult time getting a hold of affordable financing, as most quality term loans—such as SBA loans—are only available to established businesses.
You can get creative with your financing: See if you qualify for a credit card with a 0% introductory APR, which is essentially an interest-free line of credit for the duration of the offer. Make your payments with that card to build up your credit history and unlock bigger and better financing options down the road, such as term loans with low interest rates.
Barter with fellow small businesses
The word barter feels old-fashioned but agreeing to exchange your goods or services with another company in exchange for what they can offer you is a time-honored practice. If you identify a vendor or supplier who might accept work in lieu of cash payments, offer what you can to offset your costs rather than assuming they wouldn’t be open to what you can do for them. What you can offer them at cost may be worth more than you know.
Negotiate better payment terms with vendors
One of the first tactics small businesses engage in when they have cash flow issues is waiting until the very last day of a payment period to settle up on invoices owed to vendors. This, in turn, hurts those vendors, who then have to wait 30, 60, or even 90 days to be paid for work.
Try coming to the table with your vendors and offering to pay them early in exchange for small discounts. Many businesses will happily give you a notable markdown if you give them their cash in hand within days of issuing their invoice—helping them avoid needing financing options of their own.
Invest in company culture
Even if your business has only a few employees, it’s a good idea to begin cultivating your company culture. Good company culture—one that champions transparency, openness, loyalty, and other sentiments that you think speak to your brand—can help attract talent more quickly (and thus less expensively) and improve employee retention.
Therefore, cutting recruiting costs and increasing your PR opportunities can be as simple as investing in your culture, making it a win for every aspect of your business.
Team up with other small businesses
Small businesses simply can’t compete with large corporations when it comes to buying power and bulk deals—unless they band together.
Buying groups, collectives, trade associations, and partner networks are all common avenues that small businesses can take to reduce costs on purchasing inventory, save money on freight and delivery, and gain access to support and advocacy. You’re not in direct competition with every small business, and joining forces can help you collectively lower the barriers to success.
Clean up your mailing list
Email newsletters have one of the highest returns on investment of any digital marketing strategy. But over time, your mailing list will begin to accrue meaningless addresses—dead addresses, fake addresses, opt-outs, unengaged subscribers and so on. It’s in your interest to scrub those addresses from your list entirely every few months.
Most newsletter platforms charge companies based on the number of emails you send or subscribers you have. You may be paying extra money just to send out meaningless emails. Additionally, your open rate will be skewed, giving you a false idea of what’s working and what isn’t.
Find the best banking option
Not all banks are equal: Some financial institutions are better suited for handling the needs of small businesses, and some may not offer services that are useful to your business in particular.
Don’t be afraid to shop around and compare different banking options. You may find that a large national bank, smaller regional bank, or even online-only bank has the right combination of low fees, balance requirements, and perks for your finances.
Buy gently used assets
Fixed assets, such as office equipment, computers, and vehicles, are often quite expensive and can easily break or become outdated in less than a year. Don’t tie up so much of your capital in new assets if an older model will do the job. Consider buying used assets that do the job and are less costly to replace if and when the time comes.
Create a customer referral program
It costs much more for a business to find new customers than to retain existing ones. You can offset the work of finding new customers by creating a referral program that rewards people for bringing their friends or peers to your doorstep.
Build a referral campaign that you can promote via social media, newsletters, and your website, providing a discount to both the referrer and referee. You’ll spend less money yourself on outreach and PR and create stronger bonds with your existing customers.
Outsource your weaknesses
If there’s any area of your business that you struggle to handle or execute in a successful and cost-effective way, you don’t have to struggle along with a sub-par project. The gig economy has grown to the point that you can find a freelancer at a reasonable price for nearly any task: graphic design, content production, bookkeeping, social media marketing, and many more. Focus on what makes your business tick and leave the ancillary tasks to the freelance professionals—it will cost you less in the long run.
Some of the above tactics for saving money involves investing money now to save it later; other methods are just about being proactive in your search for savings. Either way, engaging in the above concepts should help you save money without radically altering how you do business.