Starting and running a business can be expensive. From operating costs to small business insurance policies, the costs can easily skyrocket. At some point, companies will find themselves needing additional capital injections to cover the different business expenses. While small business loans can help, it won’t make financial sense to take out another loan whenever you find yourself in a cash crunch.
As a business owner, you have to think proactively. Cash crunches can lead to a series of issues for businesses that, if left unaddressed, can spell D-I-S-A-S-T-E-R. The good news is, you can adopt certain practices to avoid this type of situation from happening.
With that, we’ve gathered five money-saving tips for small businesses:
Negotiate with Vendors
One of the easiest ways to cut back on your business expenses is to renegotiate prices with your vendors. If you’ve been working with them for years now, you might be able to renegotiate the prices of the goods you order. Many suppliers might be willing to work with lowered prices for goods or services than to lose a loyal customer for good.
You can also renegotiate the terms of your loan. If you have been making timely payments and have a good record with the bank, you can ask the lender to waive or lower some of the fees tied up to your loan.
There’s no sure way to tell whether your vendors would agree to your request or not. But it doesn’t hurt to try. Who knows? You might just end up saving thousands of dollars on your monthly operating costs.
Market to Your Existing Customers
Did you know that acquiring new customers is more expensive than retaining existing ones? And it makes sense. Think about all the resources you need to convince new people to use your products or services. On the other hand, it takes fewer resources to keep your existing customers happy. If you consistently provide excellent customer service and offer some perks and discounts from time to time, you’ll be able to keep them giddy and excited about your brand.
If your customers are happy and satisfied with your brand, they’re more likely to talk about your store and recommend you to their friends and loved ones. In a way, you’ll be marketing your business to new customers without actually doing the task yourself or spending resources on it.
Get Sponsors for Events
Most companies often participate in events to promote their business and meet potential investors at the same time. Participating in such events can also help companies draw new and old customers. By setting up a booth, they can display posters and some products. Business owners can promote their brand and even answer questions the audience might have.
If cost is an issue, businesses can try to look for sponsors who would be willing to shoulder the majority of the costs in exchange for a bit of exposure for their brand. This can be a great trade if the sponsor sells products or services that are different from what you offer but somehow related.
Outsource Some Tasks
Employees are essential to your company. However, employee expenses can take up a considerable portion of the company’s budget. From onboarding to employee benefits and insurance, you’ll have to shell out a significant of cash to cover your staff’s expenses.
If you’re running on low-profit margins or you’re in the early stages of your business, it might be helpful to limit your full-time staff to a minimum. You can outsource other tasks that your onsite employees cannot handle. This can include marketing, IT management, or administrative tasks.
Outsourcing not only saves you money, but it can also help with your staff’s productivity. With the lesser load on their part, they can focus all their efforts on things they do best. This eliminates distractions, helping them become more efficient in performing their assigned tasks.
Work with a Good Certified Public Accountant (CPA)
Tax returns are one of the most overlooked ways to save extra money for your business. In case you didn’t know, the IRS allows businesses to review and amend unclaimed tax returns in the last three years. If you haven’t claimed your tax returns within that time frame, this is your chance to do it.
To maximize your savings, work with a seasoned CPA. A good one can usually spot businesses expenses that can be written off as a deduction. In some cases, businesses can get up to $100,000 worth of unclaimed deductions. That said, it might be worth retaining a good CPA to help you with your company’s financial matters.
Entrepreneurs know how important it is to save money for their small businesses. However, most usually don’t know where to start. In that case, the tips presented above can be a great place to start. Once you start adopting some practices above, you’ll eventually be able to set some funds aside to future-proof your company.