Running a small business can be financially challenging at times and business owners therefore need to keep their costs low where they can. As a small business owner, you will need to regularly check up on your expenditure to ensure you are not overspending, which will also help you assess where you are able to make cuts to save money.
If you are looking to cut costs for your small business, here are five great money saving ideas, some of which you can implement right away.
1. Outsourcing can help to save money
Outsourcing can be a great way to keep costs low if you need to hire somebody for a specific task. Instead of investing time and money in recruiting a permanent employee, take the opportunity to outsource them for the job at hand.
When you outsource, the cost is variable and will only be from time to time, rather than a fixed and regular cost. Once you have outsourced somebody for a certain task, you can also become acquainted with them, allowing you to outsource them again.
If you need an IT technician, for example, you might pay them on a contract or freelance basis as and when you have projects that need completing. This saves you paying a full-time employee that you do not require to be there on a permanent and ongoing basis.
2. Do your own marketing and promote your business
Another great way to save money if you are starting up is by doing your marketing yourself. When it comes to marketing, more often than not it will cost you more in time than anything else.
A good place to start is with social media, a form of marketing that is largely free to set up and use, and which has a massive user base across a variety of platforms. Make sure you invest time in setting up and growing your various social media profiles, in order to really make the most out of the potential reach that social media offers.
Another low cost idea for marketing is networking, which allows you create contacts and share your business ideas with others in the industry.
3. Use accounting software to stay on top of the numbers
Accounting software can help you cut costs through various means. The first and most obvious way that online accounting software can help you cut costs is by eliminating the use of stationery and equipment.
It can also help save business owners significant amount of time, especially if they are spending hours dealing with their expenses, income and taxes by themselves. Although accounting software may not completely remove the need for an accountant, the services you require of one can be minimised.
If you are thinking about getting accounting software then make sure that your accountant is familiar with it, as they will work with it to look after your finances.
4. Create a budget and see what you’re spending
Drawing up a budget will not directly cut costs but it will provide a vital insight into business expenses. Creating one can help you highlight your fixed, variable and one-off costs and these can help you see where you can make possible cuts.
You will need to regularly revisit the document to ensure it’s up to date, making sure saving money for your business is a priority. As you highlight your expenditure, you will have a visual of all the costs that are incurred by your business. For example, it might enable you to notice that you spend a lot on paper, which may mean you need to try to go paperless as a business.
5. Be energy conscious
There are multiple benefits of being energy conscious, from taking care of the planet and being responsible to saving money for your business. This isn’t to say you have to make huge changes such as installing solar panels, which can be quite expensive (although over the long term, you would make your money back from doing this).
However, you can implement small changes such as checking all your desktop computers are switched off at the end of the day and making sure lights are not left on unnecessarily. Let the natural light in and make the most of it, or install sensors to make sure lights are only on when there are people present in the room.
You can make it a part of your workplace culture to promote being energy conscious, encouraging employees to participate and do their bit to help your business save money.
These are some of the easiest ways to save money and ensure your expenditure doesn’t get out of control. If you are struggling financially, then try implementing some of these ideas to see how small changes can actually make a huge difference to your business.
A free guide to managing your cash flow
Our guide is packed with expert advice to help you stay on top of your cash flow.