Running a successful business means having lots of sales, yes, but it also means having low expenses. Of course, it’s important to make as much money as possible, but it’s just as important to save as much money as possible. Here’s where we can help. There are countless ways to cut down business expenses, and if you come up with more, we’d love to hear from you! However, for your benefit, we’ve come up with ten guaranteed methods of trimming down business costs. Maybe not every one of them fits your bill – (business joke) – but if they do fit your bill, then your bills are about to go down. (OK we’re done with the business jokes.) Enjoy!
Say Goodbye to Stale Supply
Starting simple, an extremely effective way to save money is to comb through every single supply you order regularly and check if you still need it. The only question to ask is, “Is this necessary to increase sales?” You’ll probably be surprised by how many things end up having no for an answer.
Maybe you’re ordering printer paper or ink on a monthly schedule and you already have enough. Maybe take a full inventory or what you do have and go from there. Investigate every transaction you’ve made in the past while, and then say goodbye to any stale supply you’ve been ordering.
Resell or Reuse
Another incredibly simple yet effective way to reduce business expenses is to pay more attention to anything you’re putting in the trash or recycling. Aside from used tissues and the like, you should ask yourself two questions every time you go to dispose of something: “Can I sell this to someone?” and if the answer is no, then ask yourself, “Can I reuse this?”
Materials like leftover paper, wood, cardboard, metal, and even plastic could perhaps be sold. As primitive as it may sound, make a sign near the road that says it’s for sale, or even contact local art centers or schools. At the very least, you could donate it all and ask for a tax receipt in return. Depending on the worth and quantity of what you donate, this could also save some cash. If you can’t sell it or donate it as a tax write-off, try and reuse it. Anything you reuse as something new is another thing you didn’t buy.
Stick to that Budget!
If you’re a business owner and you don’t have a personal accountant, then it’s likely you’re the bookkeeper. Anytime is the right time to analyze your budget, and all the time is the right time to stick to it. Of course, there are always unforeseen costs, but budget for those too! Or if you do have an accountant, have a chat. Make sure you’re spending as little as you must. The more stringent you are with your budget, the better off you’ll be. (This is also true outside of the walls of your business! Maybe do some meal-prepping instead of take-out, etc.)
Go through those Credit Cards
If it’s been a while since you’ve shopped around for a credit card, or even if you’ve just been using the same one a while, it’s time to analyze the situation. Are you paying the lowest interest rate possible? Do you have the best rewards you can get? Are you paying annual fees that another company might not charge you?
With so much else to focus on as a business owner, it can be easy to lose sight of credit card fees and interest rates. However, every time you use your credit card(s), you’re spending more than the actual cost. That’s the nature of interest, right? So, if you don’t have to use your credit card, don’t! Maybe even keep a petty cash account with a debit card. Oftentimes debit cards are free of transaction fees and very rarely have any types of annual fees.
We all know that statistics are the poster children for being two-faced. There are countless ways to interpret them, and oftentimes business owners consider them meaningless. However, get a load of this. According to a six-year-old article published in Corp Magazine, “U.S. businesses waste $8 billion annually just managing paper. It costs an organization an average of $20 to file a document, $120 to find a misplaced document and $220 to reproduce a lost document.”
Furthermore, only 18% of US-based companies even consider themselves paperless. The ability to go paperless has literally been around for decades. Yet less than one in five businesses have done it. Why don’t you go ahead and make yourself part of that minority? Going paperless basically gets rid of paper costs, ink costs, printer costs, and fax machine costs, all while helping the environment (allowing you to promote that you have a green business).
Work from Home (or even Relocate)
Now this one clearly isn’t for everyone. Some businesses simply require a storefront, some brick, and mortar as they say. However, if it’s possible for you to run your business from home, you’ll save crazy amounts of cash. Rent is usually one of the largest business expenses there is. Now throw in utilities, cleaning, general maintenance, taxes… It costs a lot of money to have an actual store. If you can work from home, even if it costs you a little money to get there supply-wise, it’s worth it.
The possibility of relocating, however, applies to all business owners. Is your store too big? Is your parking lot always half-empty? Shop around for smaller, more affordable places to run your business if you simply can’t do it from your living room. Think outside the box, too. Look for apartments for rent and see if you can utilize the space commercially. If you’re handy, look for more affordable places that might need a little TLC. Sure, you might spend a little to get it going, maybe even a few thousand dollars, but if rent is, say, $750 cheaper a month, time is on your wallet’s side.
Perform a Technological Revamp
Can you account for every single optimization app or automation solution you pay for? Are there more efficient and cost-effective options? Chances are the answer to the first question is no and the answer to the second is yes. Perform a thorough analysis of every online service you pay for, and then give your business a tech revamp. (Hint: One major expense in this area that people often forget they’re paying for is extra space, whether it’s online storage or extra data on your phone or anything in between.)
Another focus here is to cancel any and all subscriptions that you don’t use regularly, or that serve as redundant. Maybe you’re paying for two apps that do the same thing. Maybe one app you have does everything six other apps combined do. If you’re simply not computer-savvy, (and don’t happen to have family who is), talk to friends and acquaintances. Surely someone you know can help you comb through all of that digital cost.
Whatever it is you’re ordering, chances are that multiple vendors sell it. Maybe it’s time to make sure you’re paying the least you can for supplies. Maybe that means having a discussion with your current vendors, especially if you have good working relationships with them. But maybe it means cutting ties with them altogether. Business is business, after all, and if Jane sells for $5 what you’re currently paying Johnny $6 for, the time has come to contact Jane. Every dollar counts, especially on repeat orders. Think about that budget of yours from method number three back there. It could be even tighter if you spend some time comparing and contrasting your options.
There’s another way to think outside the box here, too. Depending on what you order for your business, consider buying used. Oftentimes you can find mint-condition items for cheap on peer-to-peer sales apps etc., sometimes gently used and sometimes even brand new. (Hint: When it comes to the type of supply almost every business needs – office supplies – buying used and in bulk can save boatloads of bucks.)
Make the Best of your Space
While this may at first sound more like a cosmetic suggestion, it can also save you money – especially if you’re expanding or plan to. Go through that attic. Go through those junk drawers. Get rid of that pile of papers that’s been in the corner of the office since ’97. Rearrange your workspaces to make more room, and, well, you’ll have more room. This way if you’re expanding you can accommodate instead of purchasing more space or another building.
Is there a chair that never gets sat in? Is there a shed or another on-site structure that doesn’t get used? (Should there be?) Do you have a separate meeting room and break room? Not anymore you don’t. Use one for storage and the other as a dual-purpose room.
Also, it’s not just about room for expansion. Organization produces efficiency which produces dollars since we all know that time equals money. Therefore, logically speaking, optimal space utilization also equals money… saved anyway.
Your employees know more than you think.
No, that’s not a threat. Jill in accounts receivable does not know that you wear lucky underwear every Friday. It means that your employees probably have more skills than you realize. Make the most out of your staff by finding out everything they’re good at and applying it to your business. Cross-train everyone to be able to do others’ jobs. Do you have a few fast learners? Give them more responsibility! Sure, it might mean giving them a raise, but consider this… Would you rather have twenty people you paid $10 an hour or ten people you paid $15 an hour if both groups got the same amount of work done?
Not to mention, people enjoy helping for the most part. It might not be that you have to cross-train everyone and give raises. Maybe just ask for a hand every once in a while from employees you normally wouldn’t ask it from. If you have a good relationship with them, which you should be successful, they’ll be eager to help. Offer non-pay raise incentives, such as gift cards to a local restaurant, or even that ever-wanted day off.
There are obviously more ways to save money than this. However, these ten methods do absolutely no harm to anyone and are guaranteed to line your pockets. You could fire half your staff and work doubles for a year as well. However, that comes with its own set of emotional aspects that maybe you want to avoid. That being said, if you have employees who are simply problems, don’t fear letting them go. After all, you and you alone have a business to run, and without team players, it’s going nowhere.