10 Cost Saving Ideas for Small Business Owners
With an economy that’s struggling, every small business owner is looking for ways to increase profits, save money and improve efficiency.
The good news is there are plenty of ideas that you can find in books and articles. But rather than cover the obvious ones, in today’s tough economy you need new and creative ways to save.
Consider the following ten cost-saving ideas for your small business:
You can lower storage costs, printing costs and improve overall efficiency by running a paperless office. By scanning documents you can send and share information effortlessly saving your business time and money.
Use a 0% credit card balance transfer
Transferring the debt balance from one card to a 0% intro APR card is a great way to save money on interest charges and pay down your debt. For example, if you had a $5k balance on a card with a 17% APR and transferred the balance to a credit card with 0% intro APR for 15 months, you would save $862 in interest alone!
To avoid the big upfront costs you’d face when purchasing equipment consider a lease. You not only conserve your company’s cash but you can save a substantial amount of money in repairs, upgrades and maintenance since many lease agreements cover these expenses.
Collect cash in advance
When extending credit to customers consider collecting a percentage of cash up front with every purchase. This will help your company reduce risk, improve cash flow and save money in collection efforts. For example, you can require a 25% down payment on all future purchases made from your net 30 account holders.
Ask for the discount
The suppliers you work with may have quantity discounts of 50% or more depending on the terms. You may be able to meet these requirements and qualify for a lower price. To find out, ask about discounts and what you need to do to earn them. You may be able to get anything from an interest-free loan in the form of vendor credit to a healthy discount for paying early.
It’s no surprise that banks are looking to squeeze more revenue out of fees to make up for all the new regulatory changes. However, Bankrate’s Greg McBride says it best, “As consumers we’re not hostage to these higher fees, but we’ve got to be on our toes and be proactive about avoiding them.” Do everything possible to avoid fees like an ATM surcharge, bounced check fees, and most recently the debit card fee. If you can cut significant costs by switching to another bank then it may be just what you need to do to save your company money.
Consider bundled services
Some companies offer bundled services that include phone service, cable, internet, fax, and web hosting. Bundling two or more services from the same company can save your business hundreds of dollars per year.
Use Payroll Debit Cards
With a debit card payroll system your business can greatly reduce its administrative costs. It eliminates the expense that goes into printing checks and lowers the risk of fraud. This is a major benefit since 60% of all fraud incidents within a business involve employees, according to the Association of Certified Fraud Examiners.
Manage Employee Spending
The misuse or abuse of company-issued credit cards occurs among employees at every level. By setting guidelines, activating pre-set limits and alerts and monitoring your monthly spending reports you can save money and avoid costly mistakes.
Offer Electronic Invoices
Electronic invoicing (e-invoicing) is the issuing of invoices by email directly to your customer. You can reduce your company’s print and postage costs if you begin sending invoices electronically.
Whether you are a start-up or an existing business, it’s important in this economic environment to do whatever is possible to look for ways to save money. Start by putting a cost-savings plan in place for your company and then take action as soon as possible.