Every small business owner would like to save money, but it’s often easier said than done. Furthermore, when cutting back on costs it’s crucial to consider the impact it could have upon your small business. Fortunately, we have four simple ways to save money in your small business without damaging your output (or sacrificing your morning lattes.) Look out for the following seemingly small cash leaks so that you can plug them up and boost your profit margins.
1. Learn How to Haggle
Many business owners don’t realise that it’s possible to negotiate expenses such as insurance, phone contracts and energy costs… because they never even try.
Let’s be totally honest here: no-one really likes haggling, but it’s worth it because it can save your business a significant amount of money.
Start by shopping around to see whether or not you could get a better deal elsewhere – price comparison websites are particularly useful for this. Being able to quote a competitors’ numbers greatly increases the chances that a company will bend over backwards to try and keep your custom.
Be aware that this won’t work every single time but even a few successes can save you a noticeable sum of money every month.
2. Review Your Subscriptions Regularly
Every one of us is guilty of signing up for a monthly service and then forgetting all about it. Take a moment to sit and review your monthly subscription costs so that you can cancel the ones that are no longer beneficial to your business. For the services you do still need, it’s still worth shopping around or contacting your provider to see whether they are willing to offer you a better deal – see the above tip.
3. Prioritise Paying Off Your Debts
Consider increasing the monthly payments on your current business loans. Paying back a loan faster means that you will end up paying less interest, and it may help to boost your credit score, too, meaning you’ll be able to negotiate better rates in the future. If you currently have multiple loans, prioritise the one with the highest interest rate or consider combining them through debt consolidation.
Of course, before increasing your monthly payments you should sit down and calculate how this will affect your cash flow. Boosting profitability is fantastic, but you shouldn’t starve your business of cash in order to do so. Speak to your accountant and create a realistic payment schedule to help you save money whilst maintaining a healthy bank balance.
4. Switch to Cloud Accounting Software
Spending money on cloud accounting software may seem counterproductive when you’re trying to save money for your small business, but a cloud-based accounting system is an investment that will save you money in the long run.
Firstly, a cloud accounting system will help you to accurately understand your costs and analyse your own spending, thus allowing you to see where you can realistically cut down on expenses and implement better money management habits. This is very difficult to do when your records are patchy and poorly organised.
Furthermore, using cloud accounting software will help you to save money on your tax return by helping you to keep a track of all of your tax deductible expenses. This type of software will also save you a significant amount of time by automating calculations, organising your files and centralising your financial information.
Saving money for your small business doesn’t have to mean cutting out coffee and switching to single-ply office toilet paper. The most effective ways to save money in your small business are maintaining an awareness of your financial situation, negotiating your monthly bills and managing your debts well. These simple solutions can result in serious savings and greatly increase your profits, so start putting them into action today.