What’s one of the hottest topics on the lips of every company owner? Saving money on business expenses, of course.
With more than 30 million small organizations in the United States, founders and CEOs are always going to be stretched for cash. After all, they’re trying to vie for a piece of the same pie. And that can be challenging.
Whether you’re just launching as an entrepreneur or you’ve been in the corporate world for decades, why not try saving money on business expenses using the following strategies? Each method for saving money on business expenses will help you get a little leaner, not to mention allow you to keep more profits in-house.
Opt for Remote Work
If you haven’t noticed already, the cost of offices for sale or rent can be astronomical. Even if you can afford to lease or buy a space, you may not be ready to take the plunge. But how else can you possibly ensure that your team has a headquarters?
The answer is simpler than you might assume: Go virtual. Many companies have realized that allowing their people to telecommute makes fiscal sense. Everyone can work from home or another location, removing the need for yet another monthly bill or long-term contract.
Of course, if you’re going to take everything virtual as a way of saving money on business expenses, put a few measures in place. First, make sure your software is cloud-based and accessible to all employees. Secondly, structure workdays to include check-ins and project management follow-ups. Finally, use technology like videoconferencing to begin building a culture even though everyone’s remote.
Take Advantages of the Gig Economy
Bringing full-time or even part-time employees into your business can be expensive. You have to pay salaries, taxes, and benefits. However, you can get around having to permanently onboard lots of talented workers by taking advantage of the growing gig economy.
Many freelancers and independent contractors are available to hire on an as-needed, contractual basis. You simply pay them for the work they do, and they have the right to do the work whenever and wherever they please. This way of saving money on business expenses can introduce you to some of the best-of-the-best in their fields, such as editors, IT superstars, and human resource experts.
Who knows? You might end up offering someone an independent contract position, only to hire the individual later on. That’s the beauty of jumping into the gig economy: Both sides benefit from the experience.
Join a Group Purchasing Organization
It doesn’t matter if you’re buying jars of condiments for your food truck or scrap metal shears for your manufacturing plant. Either way, you want to spend as little as possible on whatever you order. Unfortunately, negotiating as a small commercial entity can be hard. That’s where group purchasing organizations and co-ops come into the picture.
How does a group purchasing organization work? Essentially, the organization does all the negotiating with vendors. All you have to do is place your orders and receive your merchandise, all at a lower cost than if you were to try to buy something on your own.
When you’re interested in saving money on business expenses, investigate group purchasing organizations that offer discounts on items you already buy. You may even be able to find group purchasing organizations that are free to join, allowing you to keep the cash you would have spent on a membership.
Opt for Free and Cloud-Based Software
The price to keep up with software changes and updates can start to eat away at your budget. One method to get around this problem is by only using free software. There are tons of free software for companies on the Internet. And even if you realize that you have to upgrade to a modest monthly subscription, it can be a huge deal.
Not sure what kinds of software would make the most sense for you and your team? Hire someone from a local technology consulting services provider to get you off the ground. Though you’ll have to pay the consultant, you will reap the advantages of knowing which products are most suitable to achieve your company’s goals.
As a side note, always make sure that any software you and your employees use “communicates.” It’s very difficult when you’re using several software packages that don’t work seamlessly.
Hire for Promise, Not Experience
Let’s say you were the owner of a commercial lawn maintenance company. You need to hire another worker because summer’s heating up and people are calling about their landscaping needs.
Candidate A sends you a resume indicating she’s worked on lawns for a few years as a part-time gig. Candidate B sends you a cover letter indicating an interest in the position but admitting that the only yard work she’s done was mowing her family’s lawn and working in their tiny garden.
Out of curiosity, you set up interviews with both applicants. Candidate A arrives 10 minutes late, never apologizes, is chewing gum, and constantly looks at her cell phone. Candidate B arrives 15 minutes early, seems to have a positive outlook, and asks about your company’s vision for the future.
In this scenario, who do you hire? The one with experience or the one with potential? A major strategy for saving money on business expenses is to evaluate if you should pay more for credentials or pay a little less for a promise. Often, you’ll find that when you hire someone with a go-getter, open-minded attitude, you and your business will benefit.
Buy Used Equipment and Furnishings
It’s a regrettable truth, but lots of small businesses go out of business every year. When they do, they frequently liquidate their assets. If you’re in need of anything from a cubicle system to a forklift, think twice before immediately heading to the nearest technology supply store or forklift dealers. Instead, see if you can find pre-owned items with plenty of life left in them.
Buying used makes sense, even if you’ve been open for a few years. Plus, it’s a greener way to operate. Every time you give life to something that would have ended up in the landfill, you keep the earth a tad bit cleaner. As long as whatever you buy is still in decent shape, you’re getting a win-win deal all around. After all, you’re saving money on business expenses and saving the planet.
Go With Grassroots Marketing
You have to get your brand some visibility, but you don’t have to spend a fortune to build buzz. Grassroots marketing efforts, such as low-cost guerrilla marketing, take time but help you reduce how much cash you spend on advertising. For instance, you may want to beef up your presence on certain social media sites or try to snag interviews for podcasts and publications.
The idea is to put as little as possible toward marketing while still getting a return on any investment. It’s not always the easiest or fastest way to get your company known, but it can be a lucrative way of saving money on business expenses.
Compare Shipping Costs
Do you ship out merchandise as part of your business model? If you haven’t compared and contrasted shipping methods and costs for a while, now is the time. Many shipping organizations are offering highly competitive deals to transport items big and small.
Of course, you may want to really think outside of the box and potentially start up your own internal shipping system. After crunching the numbers, you might find that it could pay off handsomely to purchase used trailers and just handle all your own delivery. Be sure to find out about insurance liability if you go that route, though. Having a fleet of vehicles will change what you need in terms of insurance policies to fully cover your business.
Cut Down on What You Toss Out
You may have wanted to go green this year, anyway. One way to put on a sustainability push is to toss less out. Not only will you dramatically reduce your commercial waste removal costs, but you’ll be moving toward more eco-friendly operations.
How can you minimize what goes in the garbage? Try to limit the amount of paper that you print or use, opting instead for doing as much online as possible. You can also buy recycled printer cartridges, encourage employees to bring reusable water bottles to work with them and make sure office products you use are ethically sourced.
Crowdsource Cost-Saving Ideas
As you’re brainstorming ways for saving money on business expenses, remind yourself that you don’t have to go it alone. Your employees probably have a very good idea of where you could cut down on costs. Make sure to ask them what they think and gather their input as part of your fact-finding mission.
Even if an employee comes up with a thought that seems far-fetched, such as looking for repairable salvage cargo vans for sale to use as mobile billboards, give the concept a second look. Sometimes, what seems to be impossible or too eccentric may be just what you need to breathe new life into your business without sending money down the drain.
As a side note, be sure to reward workers when you use their original ideas for saving money on business expenses. A modest gift card shows your team members you appreciate their help and want to pay them for their innovative thinking.
Ask for Referrals
It doesn’t matter if you run an architect design firm in a well-known city or fashion retail shop in a quaint, gentrified neighborhood: You can always use referrals. What are referrals? They are the names of prospective customers who are referred to you by current, usually highly satisfied customers.
Referred customers are more likely to buy what you’re selling because they have heard great things about your company. That means you can convert sales with less effort and more precision.
Getting referrals consistently requires that you set up a referral program and system. Make sure you’re asking happy clients to refer their friends and colleagues to you. And when they send you a buying customer, reward them with a monetary “thank you” to encourage them to keep sending more referrals your way.
Bring Commission-Only Workers Aboard
Does it seem like you’re spending way too much in employee costs, yet you could use a few more salespeople? Some people might be willing to work on a commission-only basis, at least for a specific amount of time.
The benefit of having commission-only salespeople is that you don’t need to pay them until they close a deal and you have the money in hand. To be sure, most people aren’t cut out for commission-only relationships with businesses. Those that typically have a lot of confidence and a record of selling.
Negotiate Everything
If saving money on business expenses is vital to the success of your company, you’ll want to put on your negotiation hat for every transaction. From corporate truck repair to your office lease, always ask for the best deals the other vendor can offer.
You won’t always get a sale on everything, but you’ll definitely get more items for much less if you ask politely.
Offer Deals for Buyers Who Pay Early
Does it seem like you’re always chasing down people who owe you money? Do most of your payments come in at the last minute? Make it lucrative for others to pay you by offering a discount for paying their bill early.
For example, you might operate a house cleaning service. Families that pay for three months’ service upfront could get a 10% or 15% discount. That way, you’d get something and so would they.
Join Industry, Trade, and Social Associations
Finally, be sure to join your local Chamber of Commerce and other associations. Being visible as the head of an organization will put you front and center, giving you loads of recognition without costing too much.
Be sure to get on committees or even the board of some associations to further spread the word about you and your brand. This is a long-term way of saving money on business expenses because the relationships you make with other association members can net you everything from customers to talented employees.
It’s not hard to keep more of your pennies from flying out the door. Simply use your imagination and work on a few proven strategies for saving money on business expenses.