During this global pandemic and other times of economic depression, businesses need to remain fluid in order to change with the times and survive through the hard times. Even when business is good, why would you spend more than you need to for running your business. Saving on business expenses could be the key to expanding your business or simply hiring another employee so you can have more family time. No matter what reason you have, there are multiple ways you could save money by cutting costs in your small business. 

Of course, some of the tips shown here will depend on what type of business you own, however, you should be able to apply at least a few of these to your business and reduce your expenses.

Negotiate or Renegotiate with your vendors

If businesses are all going through hard times then it stands to reason that your vendors are also feeling the pinch. It makes sense that they will want to retain you as a customer and this opens an opportunity for you to negotiate with competitor vendors and renegotiate your contract with your current vendors. Any vendor that has a competitor will attempt to out-compete the competition and sometimes, this comes from reducing the cost of the material or products they supply to you. What kind of vendors can you try to negotiate with? Well, quite simply, unless you are under an exclusive contract as per some franchise criteria, you can negotiate the cost of just about anything such as stationary, phone services, bookkeeping costs, heating costs and shipping costs. Why not talk to other suppliers and see if they will go the extra mile to gain you as a customer and save you money in return. 

The World Of Virtual Communication

During this pandemic, virtual communication has become the only option for many people to remain working and thus, this option comes as no surprise. Many have already discovered the benefits of virtual communication. This has saved many businesses costs related to travel and in more extreme cases, eliminated the cost of office space for many digital companies. If this is an option for your business, even partially, you should embrace it as much as you can.

Negotiate your Business rental cost

As in any economic crashes, whether global or local, businesses close and there is nothing worse for a property owner than a vacant lot. Chances are, your landlord will prefer to give you a cut in rent, than to lose you as a business tenant. If there are many vacant spaces suitable for your business, you could consider trying to find a cheaper space depending on the lease of course!

Optimize Opening Hours

Every small business manager should keep track of how much money is generated every hour of the day and generate trends to show this. For example, if your income generated by the business after 5pm is less than the cost of hourly employees and running costs for that time, why not close at 5 instead of losing income generated throughout the day simply to stay open a little longer. This means you save on employee salaries and hourly running costs of the business. Not only that, you get extra time to yourself and that's worth its weight in gold!

Optimize Employee Hours

You would be surprised how many people want to work just a few hours per day. There are many people in the workforce who want to work partial days to accommodate family schedules such as school times. These people are ideal for filling the short periods of peak business hours such as lunchtimes for restaurants and cafes. Remember, an efficient business has the right amount of employees to deal with demand but not more than it needs. Do an analysis of your business and make sure your employee hours are just what you need.

Outsourcing

Outsourcing is something that can save you money by doing it, or by not doing it. It is your job as a business owner to do the research and figure out if it is a benefit to you. 

Outsourcing can save you money in various ways. For example, hiring a bookkeeping company instead of hiring a bookkeeper as part of your team could save you significant costs. This includes paying for employee benefits in addition to salary, especially if you don’t have enough work for a full-time employee. Also, lets not forget, you can negotiate a rate among the competing bookkeeping companies to find the best deal. 

Reducing outsourcing can also save you costs if the work can be done another way. Why hire a cleaning company if you have employees who can do the same work during the slow times at an hourly rate. To determine if this is right for you, you should consider the complexity of the job and the cost of the outsourced service versus your employee’s hourly rate and see which is cheaper. You should also ensure the quality of the work is the same. 

Advertising

Reducing advertising to save money is rarely a good choice if advertising is what brings you business, however, it makes sense to spend your advertising budget wisely. For example, instead of paying for online ads such as google ads continuously, why not instead pay for SEO on your website. The benefits of SEO are long term and not necessarily a continual commitment of expense. Also, another expense you can negotiate among competing companies. 

Another option would be to build social media advertising as ‘posts’ on social media are free advertising to your clients and specifically targeted at your audience. They are also interactive and allow you to build a relationship with clients and respond to queries. Another benefit to consider is that adverts on social media are often significantly cheaper than ads on search listings. 

Trade of Services

Bartering may seem like an ancient form of business but it is very much alive and well and could be a great way for you to save money on services. As an example, consider a marketing firm negotiating a trade of marketing services with a bookkeeping company. This means the bookkeeping company gets free/reduced marketing for their business and the marketing company gets free/reduced bookkeeping services for their business. This means each business gets their service (marketing or bookkeeping) at cost price (of their service), reducing their overall expenses. Make sure you do your research to determine you are getting a good deal in your negotiation. This could mean getting quotes for the service from multiple companies and ensure the service you are receiving is worth more than what it costs you to provide the exchanged service. 

Rely On Shared Digital Services

Documentation is expensive. Material costs, storage, forming libraries, all have costs and time associated with them. Keeping digital documents on cloud networks saves space, makes indexing easier and is transmitted easier and quicker. 

Offer Internships

If you have the type of business that offers valuable work experience to people hoping to enter a similar business, you can offer internships which are usually unpaid. This benefits you, the business owner, with free labour, while the intern gains valuable experience which can help them get a step up in the industry. This is common practice in many industries so make sure you are not missing out

Combine & Save

Some of the tips mentioned above may not save a lot at once, but combined and over an extended period of time, can add up to a significant saving and with little effort. 

If you need help with trying to implement money saving tips to your business, contact business coach David D’Silva and get saving.