Small businesses are usually hard pressed for money. Cash is required not only to meet the daily expenses, but also to ride out tough economic times and compete with larger players. Money saved is money earned. We will look at some small businesses cost cutting strategies with which they can save money.
- Maintain an expenses journal – Don’t try to remember financial transactions in your mind. Write down all payments made in a journal. This way you can track who owes you money and how much. You can also pinpoint the major expenses and identify wastages.
- Make a budget plan – At the start of each month, make a business budget planning that lists all expected expenses. Prioritize items so that you spend on the essentials before other items.
- Rent rather than buy – Office space, furniture, copiers and computer hardware can be procured on rent. It is not necessary or practical to buy everything outright.
- Don’t over hire – Hire people as per the work load. You can always hire freelancers or interns when things start picking up.
- Car pooling – If your employees live close to each other, they can save money by car pooling.
- Leverage the cloud – Instead of buying expensive software, look into software as a service.
- Buy used goods which are in good condition – If you don’t need brand new equipment or if your length of usage is short, then it is better to buy used items.
- Use Skype – This tool can save you lots of money in terms of phone calls. The paid version is also well worth the investment.
- Buy in bulk – You can partner with other firms having similar requirements to buy items in bulk. Generally bulk purchases come with attractive discounts.
- Use recycled printer cartridges – Printing makes up a sizable expenditure in most small businesses. Buying recycled printer cartridges instead of new ones saves a lot of money.
- Apply the 80/20 rule – Instead of spending all your resources on all the customers, focus spending on the major and important ones.
- Wait and research before buying – Never be in a hurry to spend. Take out the necessary time and effort to check prices of competitors, conduct background checks before finalizing the deal. This strategy will definitely save money.
- Have an in-house team – If some work is expensive and requires expertise, outsourcing may not be the best option. Hire an in-house team to deliver quality results at affordable rates.
- Dole out expert advice – You can organize a free workshop, blog in a local paper or magazine. This makes you look like an expert and gives free publicity to your small business.
A single measure may not save considerable money and reduce business expenses. But adopting several money saving tactics and cost saving ideas consistently over a sustained period will work wonders financially for your small business.
