How Small Businesses Can Fight Rising Costs
When you’re running a growing business, every dollar counts. Every dollar saved is another dollar that can be put back into your business to bring in more customers and increase revenue. When your operating costs increase, you’ll need to find ways to cut out unnecessary expenses.
Use these tips to help learn how to cut costs in small business ownership.
Upgrade Your Equipment
As the old adage goes, sometimes you have to spend money to make money. Upgrading your business equipment may be expensive in the short term. However, upgraded equipment helps your business run more efficiently. Let’s say your company sells printed goods and promotional items. Your equipment is outdated, so it runs slower than modern machines. It takes twice as long to produce one order, so you can’t take on as many projects. By spending the money to upgrade the equipment, you can speed up production times and increase revenues.
Upgrading equipment doesn’t have to deplete your savings – securing a small business loan as well as equipment financing and leasing can help you pay for new equipment over time. Get the new or gently used equipment your business needs without losing all your cash reserves.
Get Smart with Your Office Space
To run a more efficient business while cutting costs, consider enlisting the help of new technology. Accounting software, for example, easily manages your business expenses and revenue without cluttering your office or risking an expensive mistake due to misfiled paperwork.
Technology can also help you save money on your office overhead. Smart thermostats are a great way to reduce the cost of heating and cooling your office space. You can program the thermostat to run more efficiently when you’re not in the office – if normal business hours are 9-5, program an automatic shut-off at 5 PM. Save energy by automating your lighting, as well, with smart plugs and lightbulbs. You’ll reduce utility costs without having to remember to turn down the thermostat or turn off all the lights in the office.
Go Digital and Reduce Paper Use
Reducing paper usage is an easy option when you’re deciding how to cut costs in small business operations. You’ll help the environment as well. The easiest place to start is by going digital with business processes. Invoices can be sent via email instead of through the mail, reducing paper waste and saving you money on printing costs, mailing supplies and postage. Cut down on printing costs further by switching to cloud-based storage for documents, which allow you to digitally file your business records.
You can continue to reduce your paper use throughout the office. Set printers to automatically print double-sided instead of one-sided. Keep a paper recycling bin next to the printer and reuse waste paper to take notes. You can also ask business contacts to reduce the amount of paper mail sent to your office.
Try Hand Delivery
Packaging and shipping your goods or client packages can be expensive. You can reduce your costs by delivering packages to clients when it’s feasible. You probably won’t be able to do this all the time, but taking a package across town when you’re running errands helps cut costs.
You’ll get the bonus of making your clients or customers feel important. A hand-delivered package tells your clients that you care about them.
Outsource Business Processes
When you run your own business, your time is more valuable than ever. One way to reduce business costs is to give yourself more time to focus on running your business. Outsourcing business services and processes help free up time in your busy schedule.
You’re probably not able to be a graphic designer, website developer, tax accountant and human resources expert on top of your normal business activities. Save money and time by outsourcing.
Processes that may take you several hours to complete might take only a few minutes for an expert to complete. This might cost you more money initially, but the time you free up from outsourcing can give you more time to work on increasing profits.
Track What You Use in the Office
Does your business use bulk products throughout the office? If yes, does it always make sense to buy in bulk? If no, could you be saving money by purchasing products in bulk instead of individually? Tracking spending and how much product you use is one of the first steps when deciding how to cut costs in small businesses.
Track the products you use in your office, such as office supplies. If you find you go through a lot of a particular item, consider buying in bulk to cut costs. On the other hand, if you currently buy in bulk, make sure it’s worth the money. For example, if you buy bulk bags of coffee, but only use half of each before it goes bad, you could save money by buying smaller packages.
Go Over Invoices Diligently
Everyone makes mistakes. That’s why it’s so important to go over invoices both sent and received. When you send out an invoice to a customer, make sure you include all of the charges. When you receive an invoice from a vendor, go through it to check for accidental charges or fees.
You can further reduce your invoice costs by paying in full and on time. This helps you avoid late fees on invoices. Not only will you reduce late fees or interest costs, but the simpler your invoice, the less likely you are to find costly errors.
Putting Money-Saving Tips into Practice
There’s no reason you should try to cut every cost in your business right away. Start by making small changes to your business processes each day to slowly reduce costs over time. As you learn how to cut costs in small business ownership, you can apply additional strategies to your business.
Author Bio: The Bottom Line is a blog from the experts at National Funding, a leading source for small business loans and equipment financing solutions. We show entrepreneurs of all stripes how to resolve cash flow issues and seize growth opportunities. Check in to The Bottom Line regularly to find advice and insights to help you sustain success, and rely on the resources of National Funding if your business ever needs affordable and accessible lending options.