18 Ways To Save Money In Your Business

BizAge News Team
A business person using a calculator

Running a business is sometimes an expensive endeavour. Overhead costs, including rent and advertising fees, can mount huge financial pressure on a business. Finding ways to cut costs is a smart strategy to grow and improve profitability. If your business frequently faces financial challenges, perhaps it’s time to analyse your income and expenses, which may highlight key areas of your business that require cost reduction to achieve realistic targets. Here are some proven methods to save more money in your business.

  1. Automate data entry

Data entry can be costly, and many employees dread it, too. Automating this task for your business only takes the click of a button, and can save you the cost of hiring more employees. The icing on the cake is that automation equips you to work without wasting time. You can find data entry tools that work well for your operations. 

  1. Renegotiate with suppliers

You'll find it helpful to ask your vendors for a better deal. You can renegotiate rates for internet, electricity, rented equipment, and software. While some suppliers may not budge, others will. Take time to prepare, especially if you find renegotiating deals a bit uncomfortable. Researching your supplier’s competitors will help you know how to renegotiate for a fair price. Discounts from suppliers can help you save a lot of money.

  1. Consider remote working

Renting office spaces can increase your business expenses. Consider switching to remote working if that suits your company. The Covid-19 global pandemic showed the business world that remote working can be equally beneficial when done right. Apart from reducing your need to rent physical workspaces, remote working also reduces transportation costs for your staff and cuts your carbon footprint. There are address services that allow businesses to create the impression of being headquartered in a prestigious office when your team is actually working from anywhere. Of course, this may not be for everyone, but you can always move to a less expensive space or one that shortens your commute.

  1. Go paperless

Reducing the volume of paper your businesses use is healthy for your finances and the planet. You can scale back your paper consumption in several steps. For instance, consider embracing digital note-taking, avoiding print-outs in meetings, and implementing hot desks rather than fixed desks. Going paperless reduces clutter and makes your brand sustainable. You may want to migrate internal documents like company textbooks to the cloud to further pursue this sustainable initiative. 

  1. Recruit smart and young talents

Employing young and inexperienced but talented workers generally costs your business less money. It also broadens the scope of your company. A good way to do this is to launch training programs and reach out to school leavers, including university graduates. Provide them with an avenue to hone their skills after education, and you may be getting an affordable source of labour. Recruiting young talents helps inject fresh energy into your business without going bankrupt, so feel free to consider this. 

  1. Improve your accounting

Businesses that lack accounting experts may want to pay a professional to do the job. A good accountant can provide you with an efficient financial plan and help you leverage tax relief benefits that could save you money. They may also let you claim allowances available to you and your business. Improving your accounting process will ensure that personal finances don't mix up with your business. They also do your bookkeeping correctly, make sure tax calculations are accurate, and don't miss deadlines. An experienced accountant can save your business more money than it costs to hire them.

  1. Outsource IT

Outsourcing IT to professionals saves time and money. It allows you to focus on your core functions while experts take care of the time-consuming technology tasks. Consequently, you will have enough time to carry out revenue-generating activities that will benefit your bottom line. Managed IT support services can fix your system problems remotely so that you don't have to wait for an engineer to visit your premises. Other benefits of outsourcing this function are improved cybersecurity, increased productivity, and access to advanced global resources.

  1. Ask clients for referrals

Asking existing clients for referrals is one of the cheapest ways to promote your business. New buyers are likely to choose your products and services if they are referred by trusted parties such as friends and family. It would help if you designed an attractive referral program for your company and let clients know about these opportunities. Perhaps they will be more than happy to get extra things from your business to bring new customers.

  1. Observe the 80/20 principle

The 80/20 rule is sometimes called the Pareto principle. It states that for many events, at least 80% of your income should be generated from the causes. You may notice drastic changes if you apply this rule to your business. The 80/20 principle will encourage you to focus on what works best and takes the least amount of time to complete. Following it will help you optimise your time and generate more income.

  1. Focus on revenue per employee

Your company can reduce overhead costs and save money by focusing on new metrics that are popular in startups: revenue per employee. Is your average revenue per employee lower than your expense? Try to maximise the potential of how to grow it by strategically brainstorming on new ideas and implementing them.

  1. Align operation costs with usability

Your business may be paying for a lot of essential critical services like telecommunication, data management, cloud storage, and automated tools. Reviewing such services is a smart way to align operations with usability. You can save money by ensuring your business pays for only what you need. You can also discover and discontinue hidden services that drain your business finances, so keep this in mind. 

  1. Hire freelance sales help

Many startups use the first few years to discover their go-to niche. That often means trying various channels, customer types, and markets to gauge what gains traction. Hiring freelance sales or business development teams can be a great investment in the formative years. These professionals usually come with a wealth of industry knowledge to boost sales and optimise your profits.

  1. Make sure you own your office

As with every business, there are highs and lows. However, cash flow can sometimes present itself as a serious problem. You can solve this by getting an office space if you can afford to. Owning your offices means you can leverage equity and finance terms to re-strategize your monthly overheads. For instance, a business that has ten years left on an office loan can refinance it over fifteen years with a reduced term interest rate. This strategy can potentially save your business thousands of dollars. 

  1. Cut traditional advertising expenses

You can save money by cutting a few traditional advertising expenses in numerous ways. For example, replace them with low-cost alternatives. Social media is a great tool to promote your brand, so feel free to consider this. If a traditional advertising team constitutes the biggest chunk of your small business budget, you may want to outsource the work to contractors and keep your business lean.

  1. Switch banks

Many wrongly conclude that transitioning between banks is a major hassle. Well, it probably isn’t. All that you have to do is find a better deal elsewhere by considering and comparing the various banking fees involved. Do this and make a switch to an affordable bank when possible – it will benefit your savings in the long run. 

  1. Learn to turn off equipment

Energy costs can spiral out of control if you don't develop the habit of unplugging things when not in use. Your printer, coffee machine, and lighting systems don't need to run 24/7, so switching them off will reduce your utility costs. Anything that is not in active use is not worth paying for, so keep this in mind. 

  1. Ensure your team works on time

Time is money. Therefore, employers must ensure their team operates according to schedules. This is especially relevant for industries where parts of the day are busier than others. It would be best if you understand when you and your team are most occupied; then, you can develop shifts to ensure you cover everyone at the right time. Introducing a four-day working week won't be a bad idea. It can actually give your employees much-needed time off and save you some cash.

  1. Shop second-hand

Investing in second-hand products is sometimes a smart idea, cost-wise. After all, your business doesn't always need to have the latest or fancy stuff to get basic tasks done properly. Rather than spending a lot of money on expensive brand-new items, shop around for affordable used items on websites like eBay, Amazon, and Facebook Marketplace. Concerning electronics, tech giants like Apple have special areas on their websites dedicated to refurbished equipment. Feel free to go bargain-hunting to save some money.

There you have it; 18 smart money-saving tips for your business. You can run your company on a financially healthy note with these ideas.

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Written by
BizAge News Team
From our newsroom
February 24, 2024
Written by
February 24, 2024