10 Ways to Cut Costs and Improve Your Small Business’ Bottom Line
There’s no way to get out of spending money if you want to successfully operate a business. But as a business owner, you’re always going to be focused on finding ways to make your profits outpace your expenses. One way to do that is by bringing in more customers.
But you can also increase your profit margin by slashing expenses to the bare minimum, allowing you to save more of what you bring in. While running your business on minimum expenditures might not sound very appealing, you’d be surprised what you can accomplish on a shoestring budget. Let’s take a look at some of the best ways to lower your costs and improve your bottom line.
1. Hire Freelancers and Remote Workers
Many small businesses require the skills of writers, web designers, graphic artists, administrators, and accountants, but they don’t necessarily have the budget to find, hire, and retain these professionals as full-time staff members. These days, however, there’s no need to. Use freelancers to fill positions that don’t require a full-time, year-round commitment. You can also allow full-time employees new and old to work remotely whenever possible; it’ll save you money on utilities and office space.
2. Say Goodbye to Paper
While you may not be able to get rid of paper entirely, storing your data electronically and using email for communications whenever possible will be good for the environment and your budget. The average worker in an office uses two pounds of paper and paperboard daily. Forty percent of paper printed in offices is tossed within the same day. Think of all the cash to be saved on paper and ink alone.
3. Ask for Discounts From Retailers and Suppliers
Small-business owners often qualify for discounts from retailers that sell the supplies they need, but you’ll never know if you don’t ask. Your suppliers may also be willing to give you a better price if you ask for it — from their point of view, it’s better than losing a customer. You’re especially likely to get discounts on big-ticket items. Or, you can use business-to-business barter sites to cut costs on services you need.
4. Negotiate Better Credit Card Rates
If you’re like a lot of small-business owners, you’re using a business credit card to cover travel expenses, minor business purchases, and maybe even working capital. Talk to your bank about negotiating a lower APR, which could save you thousands over the years.
5. Take Advantage of Free Services
There are plenty of free services out there that can be useful to small-business owners. Use free online estimate templates to send estimates and invoices to customers. Use Dropbox or Google Docs to share documents and information with your employees. The list goes on and on.
6. Buy Only What Your Business Needs
While buying supplies in bulk might make more financial sense if your business is actually going to use all the supplies you buy, it’s less wise to buy 500 pens if 450 of them are going to dry out before you ever get around to using them. Before making a bulk purchase, consider whether you really need that many of a specific supply and buy only what your business needs. In fact, before making any purchase for your business, think about whether you really need it. If you can manage without it and it wouldn’t require sacrificing too much to go without, you probably don’t need it.
7. Buy Used Equipment Whenever You Can
While it’s sad that many small businesses go bankrupt within the first year or two, it’s something you can take advantage of to help save money. You should be able to buy all of the office and other equipment your business needs used on Craigslist for much less than what it would have cost to buy it brand new. When it comes to software and hardware, wait until a new version is released and then buy the now-older version that will function just as well, for a much smaller price tag.
8. Use Energy-Saving Appliances
Just like energy-saving appliances save you money at home, they also save you money at the office. Depending on what steps you take to save energy at the office, you may qualify for a green energy tax credit. Get your energy provider to give you a free energy audit, during which a representative will walk you through ways you can cut your energy costs.
9. Hire Interns
When you hire interns, you’ll be able to give them some much-needed work experience while you get some low-cost labor. Of course, you might need to give them more training than you would a more experienced employee.
10. Ditch Traditional Advertising
Traditional advertising is costly, but thanks to the Internet, you no longer need to rely on the TV or radio to get the word out about your business. You can open up Facebook and Twitter accounts for your business for free, and start growing your customer base through social media marketing. Adding a blog to your company’s website is another great way to increase brand awareness.
The costs of running a business can quickly add up, and before you know it, they can erode your profits. Take steps to cut costs however you can, and you’ll soon find your profits growing more than you ever could have imagined.