The year 2020 has been a remarkably difficult time to run a small business. The COVID-19 pandemic quickly shuttered the doors of many service-sector businesses, leaving them with a significant or complete loss of revenue. This, of course, had ripple effects throughout the economy as many other businesses found their buyers or clients empty-handed on short notice. Now, many businesses are seeking to find new ways to save money quickly.
In this week’s article, we’re going to write about 20 different ways that your small business can save money. We will focus on eliminating waste first and foremost. That is to say, we’re going to stay away from less attractive options such as laying off employees.
In general, I recommend businesses advertise to grow their revenues. Some simple ways to do that include Facebook and Google AdWords. Traditional media such as print and television are also attractive options as well. That said, if you can’t draw a clear relationship between advertising and revenue, it can be hard to justify handing Facebook, Google, or some other Silicon Valley giant hundreds or thousands of dollars at a time.
Marketing never stops, though. Businesses cannot run without some level of marketing effort. For that reason, businesses may be interested in focusing on public relations, social media, and content marketing. All of these marketing techniques involve attracting customers and building relationships without a major outlay of cash.
It happens to the best of us. In the good times, it’s common to experiment with different types of software in an attempt to streamline and simplify your business, In particular, many businesses rely on cloud software with a recurring monthly subscription.
If a software is useful, then by all means keep it. Now is the absolute worst time to make your processes less efficient. It is, however, a wonderful time to look at your credit card statement and see if there are any charges for software that you don’t use and can therefore eliminate.
When people show up to the office, you have to pay staff to clean up after them. You have to keep the lights on, computers running, and coffee pots full. These expenses add up quickly.
One easy way to eliminate those incidental costs is to allow employees to work remotely. Even better, if you do this on a long-term basis, you can scale back your real estate needs as well, massively cutting costs without losing efficiency.
Odds are good that you are purchasing supplies you don’t really need. This could be anything from food that spoils before it can be eaten to fresh printer paper and ink cartridges when you already have a years’ supply. You may also reduce unnecessary supply purchases by buying generic items instead of name-brand ones.
Labor costs tend to be the most formidable expenses in many businesses. It’s no secret that hiring tenured professionals costs more than hiring greenhorns. Oftentimes, the sheer reliability and experience of seasoned professionals is worth the expense. However, if you find yourself in a pinch, a talented rookie or two can go a long way. They cost less and bring raw energy to the workplace, and under the right direction, can be just as effective as old pros.
You might think that implementing a referral program would introduce additional expenses. After all, this is technically the case if you offer a free product or a $500 gift card per referral.
However, compared to advertising, referrals are often far cheaper. If your product or service is really amazing, giving customers a reason to act as evangelists can save you money on more expensive forms of marketing such as advertising.
If you’ve ever had a meeting about a meeting about a meeting, then you know what I’m talking about. Meetings with no purpose are not only painful to attend, but they also waste labor. As I said a bit higher up in this article, labor is expensive and you really don’t want it to go to waste during a cash crunch.
Interns are pretty great to have around. They’re usually young and trying to build a career. That means they’re willing to do grunt work for far cheaper than a regular employee, and often with more gusto since internships are often better than part-time labor elsewhere.
Stop and consider how your labor is being allocated. If you think you need to hire someone, make sure there aren’t wasteful tasks that would be better off completed by a college student.
If you’ve ever been in a Costco or a Sam’s Club, you know how this works. A giant box of dried beans is cheaper per bean than a small bag. Once you’ve eliminated unnecessary supply purchases, the truly necessary ones should be purchased in bulk so that they are cheaper per unit.
Many of the tips in this article will help you to reduce your consumption of physical goods. This is the best way to both save money and to preserve the environment as well. When reducing consumption isn’t possible, reusing goods is your next best bet. Lots of common products can be put to use after their initial purpose has been fulfilled. Finally, when you’ve reused everything that you can, recycle the materials that you cannot. You may get a small cash incentive for doing so.
Unless you’re going over every single line item of your expenses, odds are pretty good that there are some tax deductions that you are not taking advantage of. Start looking for ways to optimize your business for taxes in advance so that when tax time comes around again, your tax expenses will be a lot lower!
Leaving the lights on all day is expensive. Running inefficient appliances and equipment all day is also expensive. Find ways to reduce your power consumption to protect the environment and your wallet. Go green to save green.
Having business partners that you can rely on is incredibly helpful. Strategic partnerships can help you to promote your business without relying on more expensive forms of marketing. In addition to that, working with others allows you to trade goods or services, meaning you can barter rather than spend to get what you need. Just remember to return the favor!
Oftentimes, employees would be happy to reduce their hours, but are afraid that speaking up would jeopardize their job security. You might have someone nearing retirement and looking for an easier life. Perhaps someone on your staff has recently had a child and would like to be home more, or has recently started pursuing another educational degree and needs more time to study.
Giving employees the opportunity to reduce their hours voluntarily may increase overall workplace morale while keeping your expenses relatively low.
Many retailers and suppliers are more than willing to give their large corporate clients discounts. If you haven’t taken advantage of this in the past, now is the perfect time to start! All you have to do is ask for a corporate discount, or, failing that, if there are any coupons that can be applied to your purchase. This doesn’t always work, but it saves money every single time that it does!
Smartly scaling down your operations can be a good way to save money. If you have recently authorized individuals to work remotely, for example, you may also scale down your workplace as well. If that’s the case, odds are pretty good that you have appliances, equipment, and/or furniture that you can sell. That can save you money on storing the items and bring in a little bit of revenue as well.
Banks have a tendency to charge for little things when you’re not looking. Perhaps it’s a monthly account maintenance fee or a low balance fee. Other times, they may charge too much for overdrafting or have an excessive wire transfer fee. Whatever the case may be, it’s a great time to switch banks if your bank is getting greedy. A lot of times, other banks will even give you cash incentives to switch!
If you have eight months left on your lease, you cannot realistically expect to be able to reduce your bills. However, you may be able to use space more efficiently to save money. If you are storing inventory or old items in storage units, for example, you may be able to free up office space so that you can stop paying for a storage unit.
This is a general best practice every year anyway. If you don’t keep a close eye on your medical, dental, vision, and other benefit plans, the costs can creep up quickly. If expenses are excessive right now, it’s a good idea to take a look at your benefits again. You may be able to find comparable coverage for a lower cost.
We saved the best for last, of course. In many cases, if you sell products on a regular basis, you stand to save quite a bit of money by outsourcing fulfillment. The supplies, postage, and labor expenses alone for shipping your own products can quickly become overwhelming. Companies like Fulfillrite can take that burden off your hands entirely and often save money in the process.
Economic downturns give businesses a valuable opportunity to look at the way they do things and find ways to become more efficient. Odds are pretty good that you can save money without making life hard for you or your employees. A little ingenuity can go a long way!