Looking for ways to save money for your small business? Here’s a list of tips and ideas to help you save money and cut costs.
1. Cut traditional advertising in favour of low-cost alternatives.
Thanks to the many options in internet marketing and advertising, it’s possible to cut traditional advertising costs and still reach customers. Public relations strategies using your in-house expertise can be a much cheaper and more effective form of advertising – make contacts in the media and look to be featured as a source in articles and publications. This will improve your credibility as well as make you more visible to potential customers.
You could also stop paying for traditional advertising and focus on inbound marketing. Get results by using SEO techniques within the company website and creating YouTube videos, a move which could result in a further boost in traffic to the website.
2. Get sponsors for events.
Events can be huge draws for both old and new customers, and many businesses rely on regular events, from expos to seminars, to expand their customer base. Try getting sponsors who will help carry the expense of events in exchange for some form of advertising within the event. It’s usually a good trade for both the small business hosting the event and the sponsor paying for expenses, if the two are in related areas.
3. Outsource, outsource, outsource.
Employees are essential to getting work done, but employee costs—from salaries to office space to insurance—can be the biggest chunk of your small business’s budget. Try keeping full-time staff to a minimum and outsource other work to independent contractors for the work that your regular staff cannot cover; the more varied experience in their fields of expertise, as well as the lower rates you may be able to negotiate, could result in some excellent business benefits.
4. Negotiate with vendors and think beyond the cash box.
What you’ve been paying your vendors does not have to be the final word on what you continue paying. Ultimately, vendors want to stay in business too, and many are often willing to negotiate lower prices rather than lose a regular customer. When that cash supply gets low, you could also try the age-old practice of bartering – trading off your expertise or service for another. As with the vendor negotiation, the worst answer you can get is a simple no, and you might be surprised by how quickly you’ll hear a yes.
5. Cut costs with virtual meetings.
Add virtual technology to your cost reduction strategy. Virtual meetings help minimise travel expenses, and virtual offices can eliminate the need for physical space. While we certainly don’t want to eliminate personal contact altogether, save it for the instances when it’s most beneficial. Try utilising tools like Microsoft Teams and Slack to communicate throughout the workday and hold virtual meetings on video apps like Zoom, Google Meet, and Cisco Webex. If you’re not able to convert your entire staff to a virtual situation, find a way to convert at least some of them.
6. Go green to save green.
Going green is not only a great PR move, it’s also a smart financial move. Simple tweaks such as keeping equipment on a power strip and turning it off when not in use, or replacing your existing printer with one that prints on both sides of the paper, will reduce your costs.
Technologies such as Google Drive and Microsoft Sharepoint centralise company documents and product collaboration as an alternative to paper documents. By cost cutting with virtual document sharing, you can save largely on office essentials such as ink, printer paper, and even postage.
7. Hire smart, inexperienced people.
Experience isn’t everything, and it costs more. Next time you put up a job ad, eliminate the line that says, “Must have X years of experience,” and replace it with “Recent graduates welcome to apply.”
8. Negotiate with your landlord.
Leasing property is one of the biggest expenses small businesses face. Try renegotiating a lease to save on costs. If prime retail space is important for your business, start asking about a better deal.
9. Keep your meetings lean.
On-site meetings can be expensive in terms of travel and hosting costs, and even virtual meetings cost you in terms of billable hours or salary costs. If employees are sitting in a meeting, rather than producing work or getting new clients, you’re losing money. You can’t eliminate meetings altogether, but you can limit the people who are required to participate in meetings. By keeping meetings to the lowest head-count possible, it ensures that employees’ time is well spent and that the associated costs are low.
10. Get interns.
Rather than employing full-time staff to help grow the business, try finding interns from local schools for help with tasks such as social media marketing, data entry and customer research. This will cut way back on expenses, from salaries to benefits to office space.
Combine this strategy with the virtual technology strategy. Keeping things virtual allows small businesses to avoid the expense of office space and the ongoing operating costs that come with it, and focus on producing work at minimum overhead.
11. Review all expenses, even the little ones.
It’s just smart business practice, but it’s often overlooked until tough economic times force you into it. By analysing all company expenses, you can start to cut anything unnecessary. Small cuts in ongoing expenses can add up to large savings over the long term. Review everything that isn’t providing a ROI, cut back to the bare minimum and completely eliminate anything extraneous.
12. Buy in bulk.
Try shopping for the cheapest deals on office supplies such as inkjet cartridges, and purchasing from bulk warehouses or online suppliers to save money on both the product cost and the shipping cost. Analyse your ongoing expenses and pinpoint the ones that are purchased randomly or at middle-man suppliers. Check into bulk buying and see if you can save a significant amount on those frequent-use items.
13. Do some old-school marketing.
The simple, old-fashioned practice of sending a handwritten thank you note or quick follow-up courtesy call to customers can have a huge return. Research has shown that this simple practice can lift sales by 10-20 percent, making it a definite worthwhile investment of five minutes of time or the cost of a phone call.
14. Create partnerships.
It may seem obvious, but creating partnerships with other startups to cut costs and increase reach on promotional efforts can reap valuable rewards. By giving up the print and radio advertising and focusing instead on related alliances, you can capitalise on the partnerships that grow your customer base organically. For example, if you have a shop or delivery service, get friendly with local suppliers of vegetables, fruits and meats. You can help each others’ businesses grow!
15. Reward your profit-makers.
It may seem a little backwards, but spending to save does make sense in some cases. Try taking the proactive approach of rewarding profitable behaviour from both your employees and your customers. It could mean making little gestures, like an occasional free lunch or treat, to boost employee morale and keep the work environment positive.
It could also mean offering bonuses to employees who meet certain requirements for sales or productions, and offering deeper discounts or value-added packages to your most loyal customers. If you’re spending a little money on the people who do the best work for you, or purchase the most product from you, you’re simply investing in a relationship that will ultimately bring more profit to your business.
16. Know your customer and narrow your focus.
This simple advice is perhaps the most important of all. If you know what your customers like, how they respond, what they want and what they’ll spend, you eliminate all the other options from your budget. Eliminating useless options means the money you do spend is more focused and will garner a better response, so you’re not only saving money initially, but you’ll be producing more profit overall.
Knowing your customers well will also help you narrow your business focus. This can be one of the most effective strategies for cutting costs in business. By limiting the types of services you offer and projects you accept depending on what your customers tell you they want, you can be more productive and produce higher quality work overall.
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