Two focuses of my blog are Financial Literacy/Money and Business/Entrepreneurship. When you run a business, you want to make sure to ensure profits, but you also have to figure out how to you save money as well to maintain operations so that you’re always cash flowing. The following contributed post is entitled, Money-Saving Strategies For Small Businesses.
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Balancing the books is one of the most difficult challenges for small businesses. Most startups and small companies operate on tight budgets, so it’s hugely beneficial to capitalize on opportunities to save. Generating profits doesn’t just boil down to bringing money in. It also depends on controlling spending and regulating outgoings. In this guide, we’ll explore some money-saving strategies for small businesses.
Flexible staffing structures
Staff wages account for a significant proportion of expenses for most employers. In some cases, it’s not possible to explore an array of options, but often, business owners can save by embracing flexible systems and structures. If you have a small core team, for example, you could consider options such as offering short-term contracts for specific projects or seasonal work, hiring temporary employees, adding part-time staff or outsourcing. Outsourcing is an increasingly popular option for businesses of all sizes because it facilitates access to additional services and skills without adding to the wage bill on a permanent basis. Examples of services and tasks that can be outsourced effectively include digital marketing, cleaning, IT support and logistics.
Image source: https://pixabay.com/illustrations/recruitment-agency-outsource-3182373/
Saving on technology and equipment
Most businesses rely on equipment, technology, tools and supplies to provide customers with products and services. The cost of buying and maintaining equipment can spiral. If you’re looking to upgrade technology, replace tools or buy equipment or supplies for your company, it is worth comparing prices, getting quotes for hire packages and looking for ways to save by buying surplus or second-hand equipment. For glassware, furniture or kitchen equipment, for example, search for discount restaurant supplies, compare hire prices versus purchase costs and look for companies or stores that offer used and preloved products. For retail units and cafes, you could look for second-hand fittings and try upcycling furniture.
Reducing energy consumption
The cost of gas and electricity has risen sharply in the last 12 months. Reducing energy consumption is an effective way to lower bills and make a positive contribution to the environment. There are multiple ways companies can reduce consumption, including boosting energy efficiency by upgrading to smart appliances and swapping old light bulbs for newer versions, using sensors and thermostats to prevent wasting energy and insulating business premises. If you use company vehicles, or you have a business fleet, it’s also worth exploring green vehicles. Electric and hybrid cars are often more expensive to buy but you can start saving on running costs immediately. You can also implement policies and guidelines to encourage your staff to use less energy. Even the smallest things, like turning computers and electrical appliances off at the socket, can make a difference.
Picture credit: https://www.pexels.com/photo/white-and-orange-gasoline-nozzle-110844/
Financial issues are the most common cause of business failure. If you run a small business, and you have a tight budget, you can increase profits by boosting sales and reducing expenses. Look for ways to lower spending by exploring flexible staffing structures, searching for the best deals on equipment, tools, resources and supplies, upgrading to smart technology and lowering energy consumption. If you can increase your income while reducing spending, your books should look much healthier.
Do Timely Maintenance and Repairs
Any business owner knows that saving money is essential to success. After all, the bottom line is what matters most. One way to save your business money is by investing in regular maintenance and repairs. You can proactively address potential issues instead of waiting for something to break down. This can often be done at a fraction of the cost of repair or replacement. In addition, regular maintenance can help extend your equipment’s life, saving you even more money in the long run. For example, professionals should take care of commercial air conditioning repair in a timely manner. By taking a proactive approach to maintenance, you can save your business money and keep it running smoothly for years to come.
Explore funding streams
Many business owners borrow money to set up a company or grow their venture. If you’re ready to take the next step and try to expand, it’s beneficial to explore funding streams and weigh up the pros and cons. Some options may be more accessible than others, and it’s also important to consider the cost of borrowing. Check terms and conditions and interest rates and look into options like working capital financing. Try to avoid borrowing large sums if you’re in debt and your company isn’t yet showing signs of generating profits within the next 12 months. It’s best to start small, pay back loans and then borrow more if you’re in a position to grow the business further. If you borrow too much, you may struggle to get back into the black.
