As a small business owner, finding ways to save money and be more efficient is a must
There are so many aspects of the business to manage, it can be a challenge to evaluate costs and take steps that will save you money in the long run. According to CB Insights, 29% of startups that fail do so because they run out of money. It’s worth your time to take the right steps to save your business money, wherever possible.
These seven management tips will help get you started.
1. Don’t be afraid to negotiate
Whatever third parties you pay for business services – vendors, consultants, landlord, etc. – remember that you can and should negotiate prices. Whether you’re just starting the relationship or have been paying the same amount for years, see what you can change simply by asking.
You may be surprised that third parties are willing to work with you, and negotiating could end up saving your business a lot of money.
2. Get creative with advertising and marketing
Advertising costs can be one of the biggest for small businesses. But, these costs don’t have to break the bank for your efforts to be effective. According to a study from the Manifest, 37% of small businesses spend less than $10,000 on advertising.
While advertising and marketing are crucial to business success, there are more affordable approaches, including a focus on PR instead of traditional advertising, or utilizing SEO to its full advantage instead of depending on paid ads.
3. Embrace new technology
Whether your small business is new or has been around for decades, it’s often hard to incorporate new technology into operations. If something is working, why change it?
But every process and workflow should be evaluated to make sure the most cost-efficient method is being utilized. From switching to cloud-based platforms to upgrading point-of-sale technology, look at the processes you could update with a tool that will speed things up and streamline your operations.
4. Regularly review expenses
Effective cash flow management involves monthly reviews of all business expenses and income. Each month reassess all your expenses.
Are all of these services absolutely necessary? Where can you cut back? Take a look at the perks you’re providing to employees – for example, free meals or snacks in the office.
Make sure all vendor services are still applicable. Keeping tabs on expenses each month will help you decipher what you really need to be spending on and where you can pull back.
5. Reevaluate labor costs
The cost of your labor force is likely your most significant expense. On top of salaries, you have to fund benefits like health insurance and retirement, and payroll can end up costing you as much as 70% of your total business expenses.
Consider hiring contractors for work that you don’t need full time. You won’t have to pay for the same benefits as full-time employees, and you can only get the help you need when you actually need it. Cutting back on full-time salaries and benefits via outsourcing or contracting can save significant amounts of money.
6. Find event sponsors
Whether you’re launching a new product, holding a conference, or hosting a gathering, try to find a sponsor to help you cover costs. These are also great opportunities to help you network with related businesses, learn about new technologies, and reduce overall event expenses.
7. Get accounting help
Your tax burden as a small business is not only significant but also confusing. Don’t underestimate the importance of getting outside accounting help to make sure you’re claiming all available deductions and keeping adequate records. You may be overpaying on taxes, so these steps can actually save you money in the long run. One study from the Treasury Inspector General for Tax Administration showed that over 2,000 small businesses may have overpaid on taxes by an average of $11,638.
Consider investing in an accounting platform, like QuickBooks, that will help you manage your cash flow day-to-day, so you always have something concrete to reference. Using software will help reduce your workload when tax time rolls around as well.
When you need accounting assistance or tax management services, work with the team at Franco Blueprint. We help you reduce your financial risk and increase your cash flow, helping you scale your business and set long-term goals. Contact us today to learn more.