5 Ways Small Business Owners Can Save Money

ways-small-business-owners-can-save-money

When you’re a small business owner, it can be hard. You know that it’s a competitive landscape out there, many small businesses end up failing. 9 out of 10 startups fail, and that almost half of all small businesses don’t make it to their 6th year. Keeping an eye on the money is one way to avoid this, here are 5 ways small business owners can save money:


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You’re probably looking for the best way to increase your customer base, and thereby your profits. But there’s another way to increase your business profits and cash flow, and that’s by cutting costs.

Because Profit = Revenue – Costs, you can find ways to increase your revenue or lower your costs. Surprisingly, this option can often be overlooked by small businesses as they try to increase their profits. However, it is often much easier, and something you can start doing today.

1. Track and cut down on expenses

Instead of just looking at external things you can do to save money on, look a little bit on the inside too.

Here, I’m talking about cutting down your expenses in general. For example, if you’ve made it a tradition to get everyone lattes and breakfast bagel sandwiches every morning, you might want to consider parsing that down. Purchase a coffee machine and move the sandwiches to once a week.

Once you track your business expenses and you are strict with it, you’ll be able to understand where your money is going, what the best and worst purchases are, and have a good view on the parts of your business you can cut back on.

2. Don’t do permanent hires—use cloudsourcing

The first cost-cutting method comes our way thanks to the new gig economy. Instead of having to do the entire and expensive process of finding and hiring a new employee, you can outsource.

For example, if you need someone to write content for your blog, you don’t need to hire someone. You can simply go to such sites as Freelancer or Upwork. You can find someone for nearly every single job you need to have done, from web design to content creation to social media management.

Not only do you know have to go through the long process of hiring, but firing isn't an issue either. If you don’t like their work, you can just  move on to the next person.


Recommended reading: Financial Tips That Every Single Startup Entrepreneur Needs To Know


3. Barter, trade, and pool your resources

Another simple way that small business owners can save money is by going back to the old, old system: trading and bartering. Instead of having to pay for services that you want, such as web development, invoicing, design, and marketing, why not trade it for your own services? If you do printing, propose free pamphlets and print materials in exchange for web support.

Another option is to pool your resources. If you and another business with similar needs can come together and purchase an item that will be beneficial to you both, and which you can share, why not put your heads and money together and purchase it?

4. Consider Coworking Spaces

One way to cut serious costs is to consider coworking spaces instead of renting your own office. These spaces allow entrepreneurs and small businesses the opportunity to rent office (or simply desk) space on a monthly, quarterly or yearly basis. It doesn’t require long leasing agreements, credit checks and the like, and the prices are much, much lower.

If you find you can’t afford the dedicated room, you can hire a desk. Alternatively, if you need more space, it will be easy to upgrade.


Recommended reading: 4 Ways That Expanding Companies Can Reduce Their Costs


5. Use free and open source software

Why waste money on expensive software or SaaS subscriptions? For the most part, your business does not require you to purchase software. 

For regular document processing, you can use OpenOffice or simply Google Docs and Google Sheets. For light design-related work, you can get by with Inkscape (instead of Illustrator) and GIMP or Pixlr instead of Photoshop. 

However, you should only be using free software if it is the software that your business does not depend on. So don't cut corners where you need reliable software, just where you don't.

 

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