Many business owners are feeling the pinch of rising prices and want to find ways to save money. Don’t worry, there are ways to do it. The first step is to identify where your money goes and why. Once you know that, you can look at creative ways to shave off the non-essential while still keeping the shape of your business intact.
Here are ten ways to help you get started:
- Look Beyond In-House
Outsourcing is one option that can save money in the short and long run. Temporary employees or contract workers can take care of jobs that are not a regular part of your business. Operations such as photocopying, mailing, and telephone answering can be outsourced to save on carrying these costs in-house. Another option is to sublet space from another business if you only need it occasionally. This can save on the square footage of your own operation.
- Don’t Assume Outsourcing Is Always Cheaper
While there are some benefits to outsourcing, it’s not always the cheapest or most efficient option. In some cases, it may be more cost-effective to keep certain operations in-house. For example, if your receptionist can do some on-line bookkeeping while waiting for the phone to ring, or if your warehouse worker can stuff envelopes for a mailing in between delivery deadlines, you should consider these as in-house candidates. In addition, there are some jobs that should stay in-house even if outsourcing may appear to be a bargain–those that involve issues of confidentiality or accounting operations that might help owners and managers to better understand the business.
- Take Advantage of the “Free Lunch”
Continuing education lectures, SBA seminars, informational evenings offered by local banks and corporations are often free or inexpensive ways to hone business acumen. Cut costs is by taking advantage of free resources. There are many online resources that offer helpful tips on how to save money. Do some research and see what options are available to you.
- Go Electronic . . .
One of the simplest ways is to go electronic. For example, you can replace a receptionist with a voice mail system, use email instead of correspondence, and reduce employee numbers or hours by using computer programs for bookkeeping and inventory management. You can also sell online, which is often cheaper than traditional advertising, and you can target your audience more effectively, which may result in more sales and further cost savings.
- . . . But Don’t Get Shocked
While the use of automations cell phones, and certain on-line services may seem convenient, the cost can add up quickly if not monitored. If you feel that the charges are unreasonable, try negotiating with the service provider. In many cases, they will be willing to lower fees or create a payment plan that better suits your needs.
- Shop Around
Business owners can save money by shopping around for the best prices on equipment and services. Consulting with multiple banks can also result in lower interest rates on loans. By comparison shopping, business owners can save money without too much effort.
- Offer Discounts; Take Discounts
One way is by offering customers early-payment discounts. This allows them to “borrow” money from their customers rather than from a lending institution. Another way is to take advantage of discounts that may be available. Business owners can join professional organizations to get the best rates on advertising and shipping services.
- Purchase from the Source
Save money by going directly to the supplier whenever possible. For example, if you own a children’s clothing business, go to the spinning mill to get your yarn. Not only can you specify the colors you want, but you can also find bargains and negotiate the best prices without any added costs from the knitting factory.
- Curry Favor
Choose one printer, photographer, designer, or copy service and be loyal to them. You may be rewarded with reduced rates or discounts.
- Understand that Deductibles Still “Cost”
When seeking to cut costs, business owners should understand that deductibles still come with a price tag. The only part that may be considered “free” is the amount that can be deducted from taxes, which may be as low as 25 percent. When tempted to splurge on a deductible expense, always look at your profits and see how much you’d have to earn in order to justify it.