In order to survive today’s turbulent waters, a business must be thrifty—and that goes even double for the small business. It is no surprise that things are only getting more expensive—from office supplies, to energy bills, to gas prices, to even the food we eat—but in such a competitively expensive space, how can a manager tighten their budget, without at the same time risking the overall integrity of their business? Thus, to help you on your quest to save money, here are five of the easiest ways your small business can cut costs, without compromising the quality of your actual goods or services. As Thomas Edison said, “the scope of thrift is limitless,” and indeed it is. Then again, I bet Edison never had to deal with those pesky electric bills.
5 Easy Ways For Your Small Business to Cut Costs
1) Time to go GREEN
Now, we’re not talking about going out and retrofitting your entire office with all-organic hemp furniture or those fancy waterless toilets. Going green doesn’t have to be expensive, and, in fact, not only can it actually cut costs, but it can also give your business a little edge in the marketplace. As Euromoniter reported last May, there has been an increasing consumer preference towards “going green.” With the rise of environmental consciousness across the world, customers are purchasing more green products and supporting more green initiatives, often to satisfy an intrinsic desire to feel like they’re making a difference in the world. Thus, by adding green initiatives around your business and marketing them to the public, you could actually gain some added benefits outside of just cutting costs and perhaps even generate greater revenue in turn.
From installing energy efficient light bulbs, to unplugging equipment at the end of the day, to switching to a fully paperless system, going green can be an excellent way to cut costs. Simply by prioritizing which memos or messages would be better off delivered in an email rather than over traditional hardcopy means, you can save your business a substantial amount on money in ink, postage and paper fees. Furthermore, updating your equipment and systems to more advanced models can overall cut costs associated with running your business. While true, these do require a good amount of upfront investment, these newer advanced systems are often more efficient and can save your business a great deal of time and money. With this though, as technology constantly improves, you can often find used equipment that is still fairly new, but at substantially discounted prices.
2) Utilize Technology
Modern technology is an excellent way to save money. Not only can it help to cut costs, but at the same time it can allow you to drive a more efficient business overall. By using videoconferences over the Internet, you can hold live meetings with partners and clients across the globe, without ever having to leave your office—thereby significantly reducing your travel expenses. The possibilities of where technology can take you are endless—from open-source software, to cloud computing, to online payment services, to VoIP calling, to online invoicing systems—and by capitalizing on them, the cost of running your business can be greatly lowered.
3) Pool your resources, buy in bulk and barter some
Granted, not every business can have the negotiating power of a Wal-Mart, but still that shouldn’t stop you from trying to get better deals from your suppliers. While small businesses by themselves may not have too much clout, together they can be a mighty force. For this reason, by joining forces with other small businesses (via buying groups, or similar types ventures) you will be able to seek better overall deals on your supplies and save a good deal of money because of it.
Buying in bulk is also another effective way to cut costs, from toilet paper to toner. You must though remember to do it strategically and not over buy things simply for the sake of getting a great deal.
While not often thought of when debating how to cut costs, bartering as well can save your business a great deal of money, simply by trading services and avoiding often large upfront expenditures. The trick here though is to agree to the right bartering agreement that is not only beneficial for you, but also good for your partner, so as to prevent falling into the “winners curse.” With this, joining an established trade exchange organization can be a great way to preserve cash, while at the same time generating revenue.
4) Bring the office home
Though there are many benefits to having your employees in the office, telecommuting can be a great way to both cut costs and, for the right workers, increase efficiency overall. By letting some of your employees work from home, not only can you reduce your entire office energy expenditure, but also you can possibly shift to a smaller cheaper office altogether or even rent out the unused space for extra income. Furthermore, because telecommuting has many benefits for your employee as well, they might be willing to take a lower paycheck for the opportunity—ultimately saving your business even more money in turn.
5) Look after your Receivables
As Microsoft has pointed out, one of the easiest ways to find yourself in a cash flow disaster is to give goods and services to slow-paying customers. In this regard, even the actual process of receiving your payments can be extremely expensive and a headache that wastes a lot of your resources. Therefore, by being proactive and utilizing services that automate the entire receivables process for you, your business can ultimately cut costs both short and long term—not to mention a whole lot of unneeded stress.
This post was written by Arie Hefter.