The nature of small businesses means that balancing costs against profits can be tricky, particularly if you’re still in the process of getting properly established. Here’s how you can save costs so you can enjoy more security as a business.
It’s always been difficult for small businesses to become comfortably profit-making, particularly with businesses having to pay certain costs, whatever their size. Prices of everything are going up globally too, meaning more financial outlay for businesses. While increasing your own costs can help to counteract this to an extent, it is often not enough for small businesses to enjoy the same profits and success as before.
Here are some other ways to save money as a small business so you are not paying unnecessary costs that could impact your business success.
Think About Your Office Space
As business becomes increasingly remote and digitalized, a key area you can look at that costs you money is your office space. If remote working is going well for you as a business, do you even need an office anymore? Or do you need an office space that is as big as you currently have, if you can get by with employees doing a combination of home working and office working throughout the week? Closing your office or downsizing is a great way to save costs as a business. If you need the option of doing some work in an office sometimes, look at co-working spaces or building an office in your yard. These can both work out to have lower costs in the long-run.
Consider Location
Something else to consider as a business is if you need to be in the physical location you are currently in. If people are visiting your office less due to remote working, does your location even really matter at all? Working in prime locations mean rents and business rates are often higher. If you run a physical shop but many of your customers are now buying from you online, could you switch your business model to being online only? Freeing yourself from a physical location can be a great way to slash costs.
Switch Bank Accounts
Business owners often accept some of the everyday business costs and fees, but scrutinize these to see if they are really necessary. One important area to look at is your bank account. Are you being charged monthly account fees, additional charges for foreign transactions, or fees when you deposit money? There are bank accounts out there that do not charge for these types of transactions, in which case it might be time to switch business bank account. You’ll essentially get the same service for less, which is a no-brainer for a small business.
Review Staffing
Nobody likes to let good staff members go, but keeping staff on the payroll is becoming increasingly tricky for businesses. There are significant costs involved in this, including taxes and employee benefits. Look at all your business functions and what your staff members do on a day-to-day basis, and decide whether you could save costs by outsourcing any of the work. It is often much more cost effective to work with external agencies and freelancers on work such as digital marketing and managing the payroll.
Negotiate With Suppliers
Once you have a long-standing deal with the suppliers you work with as a business, reviewing your agreement with them can become a forgotten task. It is always a worthwhile exercise to look at what you are paying all your suppliers on a regular basis, and getting quotes from other companies to see if there are some more competitive options. You may have long-term and trusted relationships with your current suppliers, but you must look after yourself and your business first. If you are paying over the odds for something, you need to rectify it.
Review Advertising Costs
You may have an established process and budget for advertising your business, but how often do you review what is actually working? Many businesses throw a lot of money at a selection of advertising tools, and as long as they get the business, they don’t look into which specific elements are working. Pinpointing what advertising is actually working for you may be a way to save unnecessary costs, without impacting your business. Also look into some lower cost alternatives, such as local flyers or increasing your organic social media activity. You may well get some refreshing benefits from trying something new.
Look At Petty Expenses
Often a quick win for small businesses wanting to save on costs, cutting down every day petty expenses can really help to turn a company around. Cut down on the coffee shop takeaways and buy coffee wholesale to make at home or in the office instead. Buy stationary supplies in bulk too, and keep an eye on things like printer ink levels, so you don’t end up buying a quick replacement cartridge from a local store at double the price you could get it for elsewhere. These things really do add up and make a difference.