There are two ways to build a profitable business. The first way is to increase sales. This is usually the side of the equation that gets all the attention. Increasing sales, however, isn’t 100 percent under your control. This is where saving money comes in. You can cut costs, spend less and ultimately add to your bottom line — without laying off staff or cutting down on the customer’s experience.
1. Track Prices and Buy In Bulk
Tech entrepreneur and contributor to SMEPals (@SMEPals), David Mercer loves to save money on office supplies and equipment — everything from pens and paper to computers, desks, chairs, electronics, software, etc. — by buying only when there are deep discounts on the items he needs. Use apps and tools like RankTracer.com to get up-to-the-minute updates on prices or try Slice App to track packages and take advantage of price drops.
2. DIY Your Content Marketing
“When you have a little more time than money, then consider making yourself the expert in your content marketing,” says Stephanie Parks, Founder of DermWarehouse.com. Start with a little influencer marketing. Find experts in your industry by looking through industry publications, interview them either via email, video or phone and then simply publish the interview. If you don’t think you’re a good writer, consider curating a few articles from your industry and commenting on them.
3. Use Powerstrips to Unplug Appliances
Did you know that up to 75 percent of electricity used is while the item is turned off? One easy way to fix this, according to business owner Steve Hatmaker, is to plug your appliances into powerstrips that are easily accessible and turn them off when you leave for the day.
4. Renegotiate with Suppliers
Like any junk drawer, your daily operations can collect a lot of fluff. Felipe Vasconcelos, owner of Elastic Band Co., recommends taking a deep dive into your operational expenses and seeing where you can find some money. Call each of your suppliers to renegotiate your rates. With one phone call, Vasconcelos’ company saved on average 25 percent in production supply costs.
5. Use Original Equipment Manufacturer’s Products
Shop around for the best quality OEM products that are comparable to the original. Vasconcelos saved about 90 percent in production costs doing this.
6. Cancel Recurring Services
You’ve probably got subscriptions to services you’re no longer using. John Kinskey, entrepreneur and founder of AccessDirect, recommends reviewing your credit card statements monthly to flush out those onesy-twosy, low-cost services that ultimately add up to a nice chunk of change. With a few clicks and emails, you can save close to 10 percent in overall costs.
7. Shop Around for Electricity
“If your small business is located in a state that has energy deregulation, one easy way that small businesses can save money is to shop for your electricity or natural gas supplier,” says Kelly Bedrich, co-founder of ElectricityPlans.com, a national electricity shopping site for homes and businesses.
8. Automate Your Taxes
When you’re a business owner, time is your most valuable asset. Barbara Karpf, president at NYC-based small business DecoratorsBest, saved about five hours a week. She’s not only saved time, but money automating her business’ taxes, which she can now put back into supporting and growing her business — focusing on marketing, specifically for her data analytics staff and programs. In her exact words: “We would be totally bogged down if we didn’t have Avalara handling all of our sales tax in over 20 states.”
9. Turn Off Your Computers
Did you know that leaving your computer on overnight can add $200+ a year in unnecessary energy consumption. Depending on how many computers you have in your office, this could be a huge savings opportunity for any small business. Evan Harris, co-founder and CEO of SD Equity Partners, encourages everyone in his company to turn off their computers. “While this sounds simple enough,in the real world it rarely gets done. This minor oversight may seem innocent, but in reality it could have profound effects on your energy usage, and thus, your energy bill.”
10. Get Free Forms
Zondra Wilson, CEO of BluSkin Care, would much rather keep the money she saves to invest in keeping others looking as good as they feel. “Cutting costs doesn’t have to be painful. It’s a matter of identifying where you want to invest and where you want to save,” says WIlson. Instead of buying forms at your local office supply store or spending time creating them yourself, you can find tons of free forms online that you can download, customize, and print.
11. Use Free Software
Visit Download.com to try hundreds of software products for free through trial downloads, freeware and limited versions of the full product.
12. Buy Second-Hand Equipment!
You can save over 50 percent by buying used computer equipment, copiers and office furniture. You can try auctions, social media and newspaper classifieds for leads.
13. Outsource Non-Essential Functions
“Retailers like WalMart outsource their data entry work of converting shopping bills into e-format. They choose to outsource because it’s a smart way to run the non-core activities by saving huge time,” says Vinoth, CEO of Apoyo Corp (an offshore outsourcing company). Your small business can do the same. If you would rather keep employment in the states, you can consider using college students or parents who are looking to take on a few hours of work while the kids are in school.
14. Staff for Peak Times
How often have you walked into a business and noticed that it was nearly empty and fully staffed? You can save money by observing and measuring traffic through your business to identify peak times and make sure that you are staffed appropriately. Problems like this and the ever-popular “Thermostat Wars” were something Daniel Malak and his team were trying to solve when they created Motionloft. This handy tool helps you collect data to identify the busiest times in your business as well as adjust the temperature in your office.
15. Join a Co-Working Space
Whether you’re a startup wanting to grow out of your home office or perhaps a mature company wanting to transition toward a more flexible workforce, co-working spaces are a great solution that eliminate the high overhead. Eli Williams Owner at Foundry35 in New York City started his online sporting goods business in his apartment. He says that joining a coworking space “ bridged the gap from budding home business into a business with five employees and a $4 million revenue run-rate.”
16. Save Financing Fees
If you offer high-priced and highly desirable products or services, you’re stuck between a rock and a hard place. If you don’t offer financing, you can be missing out on more than 15 percent of additional sales. But financing can be expensive. George Fuller, Maylee Thomas and Shane Frame are co-owners of The Guitar Sanctuary, the North Texas destination for seasoned players or those who are just beginning. Their challenge was helping guitar enthusiasts have their dream without additional costs both to the customer and to their business.
17. Get Out of Debt
Make a plan to get your company out of “bad debt”. What’s “bad debt”? If you are paying more on a loan than the revenue you are making from your investment, you have a bad debt. AJ Saleem, academic director of Surpex Tutors in Houston, found a surprising source of debt and an even more surprising solution. “We have switched to paying off software annually instead of monthly which has been used to pay off other debts.”
18. Do Your Own PR
“Don’t just think outside the box … get rid of the box! Be creative. Think guerrilla. And if that doesn’t work, sometimes it just doesn’t hurt to ask,” is how Lori Cheek, architect turned founder of a new dating app called Cheekd, saved on PR expenses. After paying a PR firm more than $10,000 for lackluster results, she invested $12.50 on black envelopes and a single card that said “This card could change your life”. She sent this to journalists and had more success and a potential appearance on “The Oprah Winfrey Show.”
19. Implement an Energy-Saving Strategy
Dana Case, the director of operations at MyCorporation.com, decided to take advantage of moving to a new office space. “We upgraded our lights and new office hardware including computers, phones and a copier, but the biggest change was that we installed a fan to circulate the air instead of using the AC all day.”
20. Post Jobs Locally and on Social Media
Luke Knowles, founder of Kinoli, has several cost saving tips that he’s picked up while building the small business behind popular deals site Coupon Sherpa and the billion-dollar shopping holiday Free Shipping Day. “Job posting sites like Monster and CareerBuilder are expensive and you end up with hundreds of applicants that flood inboxes,” Knowles explains. “Instead, we post job openings on Craigslist and through career center portals at local universities. Craigslist used to be free but now charges about $15 per post, which is more reasonable. You can also save money and contribute to your local community by leveraging social media. Post your requests on your social media channels such as Facebook.”
21. Choose an Office Space with Natural Light
This is a surprisingly simple way to save on energy. Knowles chose an office space with a lot of natural light. In addition to energy savings associated with a naturally well-lit office, he found the space offers a positive working environment for employees. “When you work behind a computer all day, access to the outdoors and sunshine is crucial to keeping both spirits and productivity up. Our office is so well designed that we use it as a recruitment tool since we have floor-to-ceiling windows with views of the Rocky Mountains,” says Knowles.
22. Frontload Your Content Marketing for the Year
Creating marketing content for your website can cost you in both time and money. Jen DeVore Richter, CEO of Rock My Image and Coauthor of “Amplify Your Business,” recommends creating your marketing content in batches. “If you are creating monthly blog posts, outline a year’s worth of blog titles at one time. Then create the blog graphics for the year using the preset titles. While you’re at it, create a corresponding social media graphic or repurpose the blog graphics into social posts. Next, write (or order from your writer) the blog articles in a batch by working on a year’s quarter at a time or more. Once the articles are written and graphics designed, you will have months worth of content ready to schedule on your website and promote in your newsletter and on social media. Once it’s done, you won’t have to worry about it! Talk about a time and money saver!” The next few tips come from Sam Carter, sales manager from Challenge Coins 4U. Carter uses a multi-pronged, cost-saving strategy that includes both vendors and employees.
23. Choose Energy Conscious (Green) Vendors
Vendors can save you money with more than just price cuts. Work with green vendors to save money. Carter says, “Our hosting provider is energy efficient, and they derive their energy from clean and green power from wind energy. This means we pay them less, and they pass on the savings to us.”
24. Go Virtual
Telecommuting saves your business money and your employees time. Not only that, but for many, telecommuting improves the quality of their life and increases employee engagement and satisfaction; and that increases profits. According to Carter, “This saves us money that would have otherwise gone to rent, utilities and commuting. All of our teammates work from home, other office spaces they have access to, co-working spaces, coffee shops, parks, and the beach!”
25. Use Independent Contractors
Too many small business owners limit their growth by not hiring. But, you don’t have to hire full-time employees, hire independent contractors instead. Carter is the only employee and he says, “Hiring freelancers gives our workers the freedom and time to go back to school, travel and work on other business goals. They set their own hours, so when they “come” to work, they are there because they want to be. This is great for productivity and employee morale.”
26. Replace Benefits with Perks
Sometimes free perks are better than expensive benefits. Carter’s firm supports the pet projects of workers at discounted rates, and sometimes for free. Among the perks Carter’s firm offers is providing free media relations services to build their employees personal brands and that of their pet projects. They also have an in-house travel agency specifically for their workers and clients. And finally, they are currently testing shared Spotify accounts, with the possibility of adding Netflix next.
When your business is PR, you’ve got to be creative about saving money so that you can leverage that savings for your clients. Alexis Chateau, founder and managing partner at Alexis Chateau PR, has several great ideas. Rather than charge clients, Chateau recommends exchanging one service for another. She even shares a personal example. The contractor assisting with renovating her home office is a barter-client of her firm. She built his website and handles his social media pages, when he requests it. She also assists with event planning and hosting for him. They never pay each other a cent, and both benefit from each other’s services. However, it’s important to check with your tax advisor or CPA about how to report bartered goods and services to the IRS.
28. Search for Discounts for Business Services at Coupon Sites
Today there are dozens of small business coupon sites that can deliver on savings for the items you purchase most. A few of them are: Retailmenot.com, Coupons.com, Yapta, Fat Wallet, Shop Local and Tech Bargains.
29. Take Advantage of Early Payment Discounts
Many suppliers will reward you for paying early — take advantage of those 2/10 discounts.
30. Check Existing Vendors for a Partner Page
Often vendors will offer generous discounts to their partners. Check on your vendor’s web page or just ask for a partner discount.
31. Check for Leaks and Fix Them
A dripping faucet or leaking toilet valve can waste more than 1,000 gallons of water per year. Depending on how many faucets are leaking or if you have leaky pipes, this can cost a small business $75-$150 per month.
32. Recycle Printing and Toner Cartridges
With ink cartridges costing an average of $50, recycling is a great cost-saving option. Recycled ink cartridges aren’t just cheaper, many retailers have programs that offer additional rewards for using recycled cartridges.
33. Use Programmable Thermostats
Programmable thermostats are low-cost, easy to install and can save you anywhere from 10 to 15 percent in energy costs.
34. Install Motion Sensor Lights
You can save an average of 45 percent and as much as 75 percent in energy costs by automating lights when no one is using the room.
35. Use Light-Blocking Curtains and Blinds
Blackout curtains can save as much as 25 percent on energy, and they can also help block up to 40 percent of noise, making it easier to work and concentrate.
36. Reduce Paper Use
Use double-sided copies by default and reuse any single-sided copies for notes or as scratch paper.
37. Check Trade Associations for Great Deals on Insurance
You can often save by being part of a larger group.
38. Use Interns for Simple Administrative Tasks
Reach out to local high schools, career centers and colleges for students looking for internships who will be thrilled to lend a hand — and gain experience in the process.
39. Leverage Social Media
Save money on marketing and advertising by doing your own social media updates. If your employees are willing and social savvy, ask if they would like to post updates.
40. Encourage Referrals and Word-of-Mouth
Instead of spending on newspaper advertising, encourage customers to leave reviews on Google. The more positive reviews you get, the more sales you’ll make.
41. Clean Up Your Mailing List
Reduce your postage expenses by eliminating bad addresses and prospects who haven’t had any engagement with your company.
42. Deduct Your Mileage Expenses
Passively track your mileage with apps like MileIQ. If you have meetings outside the office or go to networking events, be sure to track and deduct those expenses as well.
43. Pool Resources with Other Businesses
Create partnerships with other small business owners and save money on supplies and services that you all use. You can join associations or local groups, or create your own network.
44. Limit Travel Expenses
Save those face-to-face meetings for when it really matters. For simple demonstrations or update meetings, use virtual tools like Google Hangouts or Skype.
45. Sublet Unused Space
If you have a room, space or even a closet that is unused, you can earn a little extra by renting it or subletting it out.
46. Cut Back Your Work Week
Consider giving yourself and your staff an extra day or two off during the month. It’s not only a perk, and cost saver, but a natural productivity incentive.
47. Fire Unprofitable Customers
This is a counter-intuitive strategy, but customers who are paying less but who require additional hand-holding, support and hard-to-quantify services are costing you money. It’s best to let them go and find more profitable customers.
48. Clean Up Your Office and Sell Unused Items
If your office or production space is full of clutter, unused equipment or inventory, clean it up, sell it on eBay or local Facebook groups. This will free up space and add more dollars to your bottom line.
49. Cross Train Your Teams
Instead of hiring additional full-time employees, look for opportunities to cross-train your team. This will reduce boredom from repetitive tasks and add flexibility to your operation.
50. Negotiate Everything
Whether it’s suppliers, consultants or customers, or credit card companies, put your negotiation hat on. Share your budget constraints and negotiate products, services and payment schedules to meet your budget. There’s no doubt about it. Whether it’s necessity that drives the creative energy to save money or just plain good business sense, you can count on small business owners to find a way to stay profitable while growing their business and keeping customers and employees happy.
Source: Small Business Trends