Operating a business can be a daunting task. There are so many new skills to learn such as sales, marketing, bookkeeping and managing relationships with both vendors and customers. It’s quite overwhelming, especially if you are working with a very tight budget. Many days will be spent slumped down at your desk trying to figure out how to keep your expenses under control. But there are many tactics you can use to stay above water. Here are 10 effective ways to save money as you build your business.
1. Find Office Space for Less
Anyone who has ever paid rent knows that it can consume as much as 50% of your income! If you can work from home, you’ll save money and be able to write off a portion of your home expenses. In some cases, your home might not be a suitable place to work or store your products. Look for office sharing spaces or connect with one of the many low-cost co-working spaces in your city.
2. Buy Used Furniture or Equipment
While it’s exciting to receive shipments of shiny new office furniture and top-of-the-line machines, it’s better to wait till you have more cash flow. In the meantime, you can get the job done with used goods. In most cases, the equipment or furniture you get from second-hand stores or online platforms such as Kijiji, work very well. My personal favourite is Jenkins Business Equipment and Furniture in Oshawa, Ontario. Aside from being a bit worn, most merchandise is just fine and will help you save money and avoid getting into unnecessary debt.
3. Use Free Business Tools
There is a tremendous amount of software available online for all types of business services, from marketing and advertising to document management, and even accounting software. Because software solutions are a very competitive industry, service providers will usually offer a free trial period before you buy and some may offer basic service packages for free indefinitely! A quick Google search for the service you are looking for will produce several options that will help your business operations at little or no cost. Be careful though, once the free period is over you may end up spending more than you anticipated on monthly subscriptions. Use only what you really need.
4. Barter with Other Businesses
It’s comforting to know that there are other entrepreneurs who are just as budget-conscious as you. Seek out potential partners that would be willing to barter services with you to avoid expenditures on both sides. For example, you may trade your expertise in hardware repair with a company who can provide you with office supplies in return. Make sure that the barter you are receiving is a deductible expense for tax purposes. Check with your accountant to make sure you are recording the barter properly.
5. Be Frugal with Your Hiring Budget
As your business grows, you will need help to keep things running smoothly. Be very strategic about how you spend your hiring budget. A good option is to hire temporary help only during your busy season, so that your income will provide well enough to pay their wages at that time. You may also take on an intern to see if it’s a good fit before committing to a long-term contract. This approach is less expensive than hiring an experienced professional. Outsourcing skills that aren’t your forte, such as marketing and bookkeeping can save you time; time that should be spent growing your business.
6. Go Green
Save money by conserving resources. Get the most out of your paper supply by printing double-sided or avoid printing if it’s not necessary. Similarly, use LED lights or other energy-efficient lights. The individual bulbs are a bit more expensive, but you will save money because they often last for years. There are other little things that add up too, like a programmable thermostat to reduce heat when you are not in the office, or switching from paper cups to ceramic mugs in your office.
7. Pay Your Bills on Time
Stay current with due dates to avoid late fees and penalties. Some suppliers may even offer a discount for paying your bill within 10 days. Not sure if you are eligible for these discounts? Just ask your suppliers! An additional consideration is that paying your bills on time will ensure that your charges don’t double up the following month, creating an unbalanced budget.
8. Consider Leasing Versus Buying
Leasing office equipment eases cash flow immediately, by allowing you to spread the cost over a certain period of time. However, you do end up spending more for the equipment in the long run. Leasing is a good short-term solution but be sure to have a strategy for a more permanent option that doesn’t involve making payments indefinitely. Try putting aside some money to use as a down payment for a future purchase, just as you would when buying a car.
9. Use Free Advertising
There are so many ways to get free exposure for your business. Social media is perhaps the most popular free option for creating brand awareness and advertising products, services and special offers. Another option is to volunteer to speak at industry events or your local board of trade or chamber of commerce. Essentially, you trade your time and knowledge for the opportunity to connect with several potential customers all at once.
10. Get Better Rates for Essential Services
Join your local chamber, board of trade, or industry trade association. They have cost savings programs to help your business to thrive and grow. Things such as business insurance, health insurance, and office supplies can be purchased at a reduced rate. Many chamber members also offer an ongoing 10% to 15% discount to fellow members on recurring purchases such as office cleaning or lunch at their restaurant.
To find out more about how to save money and make good financial decisions for your business, contact Pam Little at firstname.lastname@example.org.