Saving money as a small business can be tricky, especially when the business is struggling. However, by following smart money-saving tips one can keep the business going even during hard times.
Making profit as a business can be a tough thing to accomplish in a competitive market. Most don’t succeed. According to studies, a startling 70 - 80 percent of businesses don’t survive due to insufficient funds.
Initially, small costs and expenses don't seem like a big deal, however, they later add up and have a rather significant impact on the overall cash flow. Reducing some of these expenses can help you save a lot of money over time.
So here in this section, we have listed down 5 expenses that you can cut today.
1. Electricity Cost
One area that typically costs SMEs more than they think is their electricity costs. If your business requires you to work for longer hours, you need to pay attention to your monthly energy bill. Reducing your energy usage not only helps you keep your business budget in check, but it’s also a great way to save the environment.
Here are a few simple ways you can save energy in the workplace:-
- Use energy-saving bulbs
- Implement light sensors
- Choose laptops over desktops
- Use hibernation feature on all computers
- Turn down the AC and fan when it’s not required
- Do an energy audit
- Print only when necessary
- Get a smart meter
- Upgrade all outdated equipment
- Make the most of Time of Day (TOD) tariff structure.
2. Office Supplies/Stationary Cost
Workplace stationery includes paper, envelopes, business cards, folders, tissue paper, pins, board, markers, pen, etc. You should continually seek out ways to minimize stationery expense in the workplace, to reduce costs for the organization.
Few tips to save on stationary cost:
- Store accounting records and other company records electronically to eliminate paper usage
- Use electronic communication media over handwritten correspondence.
- Always print test documents before beginning large printing projects.
- Buy generic brands. Buying smart and only buying what you need are the first steps to save on cost.
- Shop around online to avail discounts
- Reuse and recycle.
3. Travel Expenditure
If a portion of your monthly expenditures is directed toward getting in front of your colleagues and clients, look at ways you might be able to stay in your office and accomplish the same goals.
Today, plenty of meetings can be done on Skype, Zoom, and other online applications. You can conduct a meeting from the comfort of your company and save thousands of money on other business requirements.
If at all your business requires you and your employee to travel, follow the tips given below. It will keep your costs down without letting you compromise on your traveling experience.
- Book the lowest hotel rates and never aim for a first-class flight.
- Reduce travel costs in other areas, such as meal, intercity traveling, etc.
- Use a consistent travel booking service to avail discounts/cashback points etc.
- Involve your employees in the travel budget-cutting exercise. Make them feel responsible for this area.
- Plan ahead.
4. Try Outsourcing
It is a process in which a company hands over some part of its work or functions to a separate organization or partner. This process is highly appreciated because it reduces the burden of the company to some extent. It reduces the cost of recruitment, training, and infrastructural development. Moreover, it enables the company to take the service of highly experienced and trained experts to execute their work in a more efficient and quick form.
Outsourcing not only facilitates the company to obtain efficient services at a low cost, but also helps them concentrate and focus on their core functions.
If you haven’t started outsourcing yet, try just one function. You’ll be amazed by how much you save and how much more efficient and profitable your company will be!
5. Traditional Marketing/Advertising Cost
Marketing is undeniably important to a business’s success - particularly to an SMB, where the expansion of brand awareness could mean life or death.
Here are some ways you can reduce the cost of marketing. These tips will not only help you generate more leads but will also help you stretch your budget further.
- Analyze your data and stick with what works
- Use social media free features
- Encourage word of mouth
- Stop contacting uninterested leads
- Outsource the job to a good marketing/advertising agency
To survive in any business, you need to look for ways to save. You need to manage and tweak your budget in real-time. It will reduce the risk of falling behind and help your business stay afloat – even during crises, like the current pandemic.