Let's be honest, money is the major concern for every small business. It can be a challenge to make sure that your income is sufficient to meet overheads, as well as enough to plan for the future and even expansion. That's why it's so important to look at ways to save money. The lower your outgoings, the more money you can invest back into your business.
In this article, we'll look at some of the top ways that small businesses can save money, from financial planning and long-term strategies to smaller actions to help with day-to-day expenses. If you're looking for ways to limit your outgoings, see how these can help your small business.
There are some occasions you can't avoid spending money, and small businesses often have a wide range of expenses. When you have to make purchases, it's vital to look at cashback, air miles, or other benefits that could help add value. To get these benefits, you can apply for a business credit card that offers significant rewards.
"Small businesses often find themselves in need of lines of credit to smoothen cash flow challenges. Business credit cards can come with a range of advantages, including generous credit limits and cashback rewards. This not only provides businesses with the necessary funds when they’re needed, but cashback can have a big effect on a company's bottom line."
David Luck, Co-founder and CEO of Capital on Tap
Ditch unnecessary subscriptions
With many varieties of software, industry publications, and services being billed as monthly or annual subscriptions, it's easy to have a range of payments going out as routine. It's always worth checking if you continue to need these subscriptions. If you're looking at software, there are plenty of free alternatives to popular software, though these won't always be suitable for all uses.
While it was a necessity during the Covid-19 pandemic, remote working can still be a great boon to businesses. In fact, reach indicates that remote working could save a business more than $10,000 per employee, per year. This is mostly due to savings on less office space and fewer amenities. This can also be a great way to help improve working conditions for your employees and make them happier in their jobs.
Get the right staff and keep them
This is one that some companies get wrong. Keeping employees happy can be expensive because it means offering higher salaries, bonuses, better amenities, and more, but all of this can save money. Recruiting a new worker costs an average of $4,000, on top of the loss of productivity and any salary increase you have to offer to the new hire. Ultimately, it's cheaper to invest in keeping your valued employees satisfied rather than have to find new staff. You should also ensure that your staff feel respected and trusted as well as minimize unnecessary processes and paperwork, which can also have a huge effect on staff morale.
Get second-hand equipment
Depending on your industry, there might be a great deal of equipment you need to buy. Whether it's machinery, office furniture, or company vehicles, you can save a lot of money by purchasing second-hand items. Just ensure that it's in good condition and will meet the needs of your business. If the prices are still high, you can look at splitting the costs over several months.
"To effectively manage credit cards, it’s ideal to pay off the balance in full every month. However, they also serve as a valuable line of credit if you need to purchase expensive equipment over several months. This can really help with the initial costs of small businesses, especially if you haven't yet made enough money for the equipment you need. By utilizing credit cards for these purposes, businesses can secure the upfront funding needed for growth, while alleviating the burden of initial costs."
David Luck, Co-founder and CEO of Capital on Tap
Be energy efficient
There's a lot of buzz around being energy efficient for the sake of the planet, but it's also a great way to save money. Efficient ways to cut down your energy bills include using low-energy lightbulbs and screens, as well as making sure your workplace is properly insulated.
Switch to digital marketing
Digital marketing is the future of advertising, with more and more people looking online and on social media for product or service recommendations. Digital marketing can be much cheaper than more traditional marketing, with no large costs for print runs or TV advertising.
Small business money saving: Conclusion
Saving money is vital for a small business, especially if you're just starting out and don't yet have large or stable revenues. It's always worth getting a business credit card to help with large payments and rewards like cashback, but you can also look into reducing your outgoings on subscriptions and energy bills. Remember to also make cost-saving choices even when they appear to cost more in the short term, such as keeping staff happy.