August 15, 2019
Small business owners often realize that unexpected business expenses increase their overhead costs drastically. Here are nine effective cost-saving tips that will lower your overhead costs.
If you own a small business, you must be used to unexpected expenses popping up now and then. While these might seem negligible, add them up, and you will find that you have been spending a lot more than you expected. Or, you might also find yourself making expensive purchases regularly. Naturally, spending more money than you expect is not a feasible situation. Any small-business owner would want to save expenditures and ensure profits come in. While unexpected costs are to be expected, there are some simple ways to reduce these costs.
Invest in professional liability insurance
Professional liability insurance can protect your small business venture against claims related to mistakes, negligence, and misinterpretations. Any case against an employee or your business for unsatisfactory products/services can be taken care of with professional liability insurance.
Most professional liability insurances cover legal expenses, settlements, attorney fees, and costs/expenses related to judgment. Save your business from large expenses by investing in professional liability insurance.
Switch to technology
Today, technology offers benefits that were unheard of several years ago. You will find that it can help you save money. Technology today is easily available and can work without manual intervention – so you can hire fewer employees.
Technology, like online payment services, will make it easier for your customers to do business with you. Technology like teleconference services can save you travel expenses as most meetings can be conducted via these services.
When using paper, it is easy to forget about the additional expenses involved like ink, pens, pencils, erasers, staplers, staple pins, postage, mailing supplies, xerox machine, and xerox machine ink.
When you move to a digital invoice and billing system and use emails instead of sending letters/newsletters, your costs on stationery supplies goes down drastically. There will be less paperwork to be filed, which means your storage requirements drop down as well.
Market your business online
There are 5.11 billion unique mobile users and 4.39 billion internet users as of 2019. These numbers are growing exponentially by the day. When you market your business online, you could get your target audience’s attention quickly. Social media too makes online marketing campaigns very successful. You will spend less and gain more attention when you go online.
Cut traditional advertising to a basic minimum and concentrate on low-cost/free online alternatives. Also, instead of concentrating on simply advertising, focus on inbound marketing.
Reduce credit card debt
In the short-term, you can successfully and immediately reduce business costs by charging business expenses to a credit card. But, if you look closely at the interest rates and other fees associated with credit card use, you will find that they add up to a neat sum. If you reduce credit card debt, you can save costs on interest and other fees.
Manage your business cards more effectively. For instance, make use of rewards. Ensure you don’t mix your business expenses with personal expenses. Keep a record of all your business financial dealings. Review your business card statements immediately and regularly to ensure they are in order, and there are no discrepancies. Finally, ensure you keep an eye on your cash flow.
Cut down on office space
If you rent an expensive office space, you could consider moving to a more reasonably-priced one. Another option is to run your business from home and save money on taxes and utilities. Today, the number of work-from-home employees is on the rise. Getting employees to work from their homes rather than hiring an office is an efficient cost-saving solution.
If you are planning on running a home-based business, ensure that the zoning laws and other local bylaws allow you to conduct a business from home. Some neighborhoods are against home-based businesses. If working from home, ensure your family is not inconvenienced.
Cut down on staff
Employees need a salary, office space, insurance, and other perks. If your type of business has slow periods, you will end up spending more on staff and get nothing back in returns. Instead of hiring full-time staff, you could hire close relatives to help you with some aspects of your business. You could also get your spouse involved in your business venture.
Unemployed young people would be willing to do easy jobs for little money. You would also be helping them gain valuable work experience. Also, if you make use of technology in your business, you can cut down on staffing costs. Outsourcing your work can help you reduce staff as well.
Get sponsors for events
If you host regular business events to keep your old customers and attract new ones, you probably go the whole yard to ensure you leave a lasting impression on your audience. Some expenses might include an expensive venue, expensive food, and creating a lot of business material for your guests. These are traditional moves that, even today, successfully impress customers and potential customers. So, instead of cutting back on your events, get sponsors who will bear the costs related to the event. Look for businesses that can benefit from your business. You could trade your business services for their sponsorship.
Always negotiate with vendors
Vendors expect you to bargain. From stationery to coffee cups and more, don’t settle for the cost your vendors initially quote. Vendors rely on your business to keep their business going and are willing to negotiate costs just to ensure you continue to give them regular business. Perhaps you will get your products at a price that is even lower than your offer – you will never know until you ask. So, go ahead and bargain with your vendors.
When you find it hard to keep your small business afloat, even small changes will make a big difference to your costs. The sooner you make the changes, the quicker you will reap their benefits. If your small business is doing well, you can still make these changes and save costs.Small Business Finances – Spend Less and Gain More