It pays to be frugal when you’re on a tight budget (and what small business owner isn’t?). We’ve come up with a number of money-saving suggestions to enhance your business’s bottom line, from minimizing your legal fees to finding affordable ways to attract clients. In this three-part series, we’ll share some top ideas to save you money the smart way.
In today’s article, we’ll share top tips for reducing your finance, insurance, and taxation costs.
- Avoid any monetary advances
Don’t be tempted by the offer of a monetary advance. Many credit card issuers will impose an upfront fee that can be as high as 2% of the advance amount, with interest beginning immediately. This is often an unnecessary cost that you should avoid unless absolutely necessary.
- Compare credit scores
If you have a habit of leaving credit card bills unpaid at the end of the month, look for a card with a low-interest rate. It’s more crucial to avoid an annual charge and search for a lengthier grace period if you pay in full. Sometimes it simply pays to ask the credit card company to reduce the interest rate or waive the annual fee. Simply let the company card provider know that you are considering taking your business elsewhere. You’ll be surprised what offers they come up with.
- Check if you’re entitled to any tax deductions
Do you work from home? Don’t forget about important tax deductions. You can deduct a proportion of different home maintenance expenditures, as well as a portion of the cost of services such as house cleaning and lawn care, as a business expense in addition to a portion of your rent or mortgage interest and utilities. You can also claim deductions if you need to entertain clients or drive to customers’ workplaces. You can deduct a percentage of your entertainment charges if you entertain clients or potential clients to discuss a current or future project. To be eligible for this deduction, you must keep track of all entertainment-related costs. The amount you can deduct is likely to fluctuate each year, so verify with your accountant at the start of the year.
- Be prepared for anything
While shelling out on insurance can leave a bitter taste in your mouth. It can save you a lot of money and heartache in the long run. Consider the things that could go wrong for your firm and try to ensure you are fully covered for all eventualities. For instance, liability insurance, disaster recovery, and protection against cybercrime.
- Increase your insurance deductible
In most cases, raising your insurance deductible decreases your premiums. Even if you have to pay the deductible, the outlay will almost certainly be less than the money you save. If you are not happy with your insurance then compare business insurance quotes online to get the right balance of price and coverage.
- Be intelligent when it comes to purchasing insurance
Save by association. Check with your trade group while shopping for insurance. Many organizations provide affordable group insurance.
- Make sure your medical insurance is up to date
Ask for information on historical claims and the loss ratio of paid claims to premiums before picking a medical insurance carrier.
- Form risk management collaborations with potential partners
Form partnership plans to help each other out in the event of bad weather. According to the Insurance Information Institute, if you plan ahead for a backup location to conduct your business in the event of a severe disaster, you may be able to save money on business interruption insurance. You could, for example, make an agreement with a company in the same industry to utilize their facilities in the event of damage, and vice versa.
- Make bank deposits as soon as possible
Make bank deposits early enough in the day to receive credit (and earn interest) the same day.
- Make your payments on time
Check with your suppliers to see if they provide discounts for paying early. If not, pay your bills—including utilities, taxes, and suppliers—as late as possible. The longer the money is in your bank account as opposed to someone else’s, the better.
- Be hesitant to offer credit to others
If you do decide to provide credit, ensure that you extensively investigate the client’s credit history. Collins suggests taking the following steps for less-than-creditworthy accounts: Obtain letters of credit, collect cash up front, seek personal guarantees, provide partial shipments, ask for a deposit, get credit insurance, or consider factoring.
- Consult expert advisors
If you have been working with a given specialist, such as an accountant, tax specialist, or insurance agent, on a regular basis, you will find they can be open to negotiation on future transactions. Sometimes it can be as simple as asking for money off. Because of the connection you’ve built with the specialists you work with on a daily basis, they’re generally simple to bargain with. Inquire with your insurance agent, accountant, or attorney about ways to save money on their services. You’d be amazed at what they would propose in terms of lowering your rates, reducing billable hours, or avoiding large fees. You might also consider an arrangement by which you exchange your services for theirs (where applicable).
- Strive to be a legal eagle
To avoid unpleasant surprises, make sure you have a signed fee agreement in place before selecting an attorney. The agreement should contain an estimate of the time spent on your case and a breakdown of what is, and is not, covered by the cost, such as administration services.
- Avoid litigation
Avoiding costly legal action is a fundamental aspect of business success. Even arbitration can be costly. The best option is to try to resolve any issues before they escalate to the point where attorneys are required to intervene. Never ignore any written or phone complaints.
Money-Saving Ideas for Your Business Part 2: Cutting Employee and Marketing Costs
In Part 1 of our guide to saving money for your business, we looked at finance, insurance, and taxation.
In Part 2 of this three-part guide, we’ll present a further 15 brilliant money-saving tips for boosting your profitability by reducing employee and marketing costs.
- Pay your salespeople commissions
When you hire your own salespeople, the overhead, salary, incentives, training fees, fringe benefits, and expenditures add up quickly. Contracting commission-only sales agents from independent manufacturers is less expensive—and frequently just as lucrative.
- Make use of freelancers
Employers are not required to withhold or pay taxes on payments to independent contractors in most cases. However, be sure that your independent contractors meet the IRS’s criteria, or you might incur fines.
- Help spread the news
Are you publicizing your website’s URL? Put it on your letterhead and business cards, as well as in your e-mail signatures, and anywhere else you think potential visitors will see it. It should be printed on staff uniforms, promotional products, news releases, your Yellow Pages ad, and even company vehicles.
- Utilize a flexible workforce
Consider employing temporary personnel to address surges in business rather than paying for employees who sit idle when business is quiet.
- Make use of interns and trainees
Put your experience to good use. By employing interns, you may get free or low-cost support while also giving local college students an opportunity to learn the ropes on the job.
- Partner with other small businesses
Consider sharing the costs of advertising and marketing with nearby companies. Promote a sidewalk sale together, or take your marketing partnership to the next level by exchanging mailing lists, distribution methods, and suppliers with companies that provide comparable goods or services.
- Become an expert in your niche.
Provide professional guidance. Teaching a class, speaking at a community meeting, or publishing an article for a local newspaper not only establishes you as an authority but it also generates low-cost exposure for your company.
- Don’t overinvest in website development
When it comes to establishing an online channel for your business, keep expenditures low at first. For instance, you don’t need to invest in costly website development right off the bat. You can start by selling stuff on online auction sites like eBay and Yahoo! Auctions can be run for next to nothing. There are various “Web site in a box” alternatives available, generally for a reasonable monthly charge. You can tap into these tools to construct a professional storefront at an affordable price.
- Make your advertising more effective by piggybacking on other efforts
Including advertising information in other mailings, such as quotations and invoices, saves money on postage and other expenses. Make the most of your point-of-sale possibilities by placing coupons, newsletters, or other promotional materials within consumers’ purchases.
- Start a conversation
Find newsgroups that cater to your target demographic and get involved. By becoming a participant in online discussions, you can both generate business and learn more about your subject of interest. Your only cost is your time. Include your URL in your signature; however, don’t actively try to sell things. If you are perceived to be participating in a sales push as opposed to being there to help, your access will soon be removed. Focus on sharing relevant information that establishes you as an expert and encourages the reader to learn more about your products and services.
- Ask for referrals
Seek assistance from individuals you know. Referrals—the names of specific persons who require your products and services—are the type of assistance you’d most want to get from your connections. So, go ahead and inquire! Prospects might also get your name and phone number from your contacts. As the number of recommendations you receive grows, so does your chance of growing the amount of your business that comes from them.
- Make use of online search engines
Look through Usenet newsgroups (forums on the Internet where individuals submit messages for public reading) and special-interest groups pertaining to your target market, product, or service to research your market and locate possible users for your Web site. Alternatively, if you have America Online, go to their Small Business Center, which has free small-business information libraries.
- Do you have a satisfied customer?
Consider sharing case studies and testimonials online that contain details of how you have helped customers or the benefits they have accessed as a result of working with you.
- Make a special appearance on television
Local cable television channels sometimes offer relatively low advertising prices for various time periods throughout the day and night. Even if you don’t reach prime-time audiences, you’ll create an impact where it matters most: in the homes and cars of potential buyers.
Also Read: Everything You need to Know about Kissanime
So that’s Part 2 complete. Look out for our final article in the series, within which we’ll cover more useful tips for saving your business money by reducing your general operating expenses.
Money-Saving Ideas for Your Business Part 3: General Expenses and Operations
In Part 2 of our guide to saving money for your business, we looked at how you can get your savvy on to reduce marketing and employee costs.
In the final part of this three-part guide, we’ll present some further brilliant money-saving tips for boosting your profitability by reducing general expenditure and overheads.
- Keep control of petty cash spending
Don’t let your petty cash account fall into disarray. All the small expenditures ultimately add up. Even though you may not have to account for spending under a certain amount of money, the small amounts of money you spend every now and again will eventually mount up.
- Look for couriers that offer flexible delivery arrangements
The main couriers’ overnight delivery costs can be rather steep; however, if you’re prepared to wait a few hours—or even a day—you may save money. Obviously, this is not an option if your customer is in a rush!
- Purchase pre-owned equipment
Buying old computer equipment, copiers, and office furniture from companies like the countrywide Aaron Rents & Sells chain may save you up to 60%. Used equipment can also be found at auctions and in newspaper classified ads.
- Hire office space
Book a room in a suite. You don’t have to operate your business from an executive suite full-time to take use of its features. Executive suites address a variety of demands for many home-based businesses, including access to a private mailbox and a receptionist who can answer or divert calls to your home office.
- Purchase printer cartridges that have been recycled.
Look for a local recycled printer cartridge supplier on Google or in the Yellow Pages. That way, in addition to reducing your costs, you will also be helping the environment.
- Make use of free software
Hundreds of software programs are available for free download at Download.com, including trial downloads, freeware, and limited versions of the complete product. Another suggestion: If you can’t find what you’re searching for on Download.com, go to the manufacturer’s website. The majority of them provide free trial downloads.
- Try a temporary premises
While the price of opening a permanent retail store can be high—up to $100,000 or more, with leases ranging from three to ten years—carts, kiosks, and temporary locations can be a less expensive and risky method to get your foot in the door. The initial outlay for launching a kiosk can be very low, and you will not be expected to sign a long lease. This type of approach can enable you to test an idea out before you invest bigger bucks in your concept. After running a kiosk for a few months, you may conclude that you are good to go. Alternative, you may realize that you need to make some more tweaks to your product before officially launching a bigger store.
- Use free templates
You can discover a ton of free forms and templates online that you can download, alter, and print instead of buying them at your local office supply store or spending time generating them yourself.
- Create a buying group
Bulk purchase savings are available if you join forces with another company or a trade group.
- Directly pick up your supplies and raw materials
If you’re close to your suppliers, pick up your order yourself—or have a friend or family member do it for you. This can help to significantly reduce your postage and packaging costs. However, be careful. You should only shop for supplies when it actually saves you money. You’re not saving cash if stopping at a supplier diverts your attention away from a revenue-generating activity.
- Expand your horizons by learning something new
Depending on how much you’re operating on a shoestring, you may have to take on some basic tasks for yourself to avoid the costs of outsourcing. For instance, you may choose to create your own website by using an online website tool (it’s actually quick and easy to do). Alternatively, you may learn how to write press releases or manage search engine optimization. Don’t spread yourself too thin, but do be prepared to roll your sleeves up and get stuck in where you can.
- Bartering can help you stretch your money
Entering into an agreement to trade one product or service for another is a great method to save money while also getting rid of slow-moving inventory. If you don’t want to deal directly with other firms, engage a commissioned barter broker or join a commercial barter club or exchange.
- Become a member of a professional organization
Many trades and business organisations have low membership costs and provide savings on anything from insurance, travel, and vehicle rentals to long-distance phone service, medicines, and even gym and golf course fees.
- Get at least three quotes on everything.
Even the most commonplace items are worth looking into. If your quoted price is below that of a rival, a preferred supplier or vendor may frequently match that price in order to earn your business.
And that concludes our three-part guide to saving money for your business. Yes, we’ve given you a lot to digest. But you now have a ton of money-saving ideas at your fingertips that you can draw from as and when you need them. Simply bookmark this page and refer to it on a regular basis to make sure you have all eventualities covered off.
