Running your own business has its ups and downs, but nothing seems to be more challenging than struggling to keep your business cash flow positive. Every business owner has spent countless hours pouring over the budget and wondering how to make it work, but it takes action in order to push the needle in the other direction. Even when facing a tough economy, a mid-season slump or an onslaught of competition, your business can still succeed and thrive. All it takes is effectively managing your money. You can start with these tips on how to save money.
Become a Negotiator
Just as you would shop around for home mortgage rates, don’t settle for the first quote on business insurance or bulk pricing from your preferred vendor. Vendors are trying to stay in business just like you are, but they also don’t want to lose business. Before you shop around for a new insurance company or a new bank without steep transaction fees, try negotiating for what you want. Learn some key negotiating tactics and use them to get cheaper rates on office supplies, the internet bill or your monthly rent.
Small businesses have the luxury of abandoning traditional means of operation or advertising since there aren’t as many shareholders controlling what needs to be done. While the ultimate goal is to save money, you don’t want to do so at the expense of bringing in new business. You shouldn’t cut your marketing and advertising budget, but you should restructure the way you use your funds. Social media networks offer a low-cost alternative to traditional television commercials, newspaper advertisements or oversized billboards. Use SEO techniques and YouTube videos over paid Internet advertising.
Send the Work Out
While you may not be able to handle all your incoming phone calls and emails alone, you may not need to hire a full-time secretary either. Depending on the business you operate, you might be required to provide certain insurance benefits to your full-time employees. Office salaries and related costs can be the biggest expense you face, but outsourcing work to independent contractors can reduce those numbers drastically. Not only are you able to save on benefit costs, but you are also free to hire as needed. Consultants or independent contractors may be more willing to negotiate on a rate over a full-time employee who expects a raise.
Cut Extras Over Employees
Rather than layoff the people helping your company grow and function, focus on all the extras that aren’t crucial to operations. Office lunches or specialty coffees and creamers add up to a lot over the weeks, and it would be better to minimize these perks instead of laying off the part-time cleaning lady. You could host a once-a-month lunch rather than every week in order to still keep morale up. You could look into reducing your office supply ordering to standard items rather than employees picking out exactly what they want. Choose to eliminate extras over people.
Focus On Energy Costs
Utilities are an expense that every company has to pay, but the lower you get your electric bill, the more money you have staying in the bank account. Install a programmable thermostat to have more control over the HVAC system, and don’t let employees adjust the temperature as they please. Change out old light bulbs for LED ones, and turn off power strips when the business shuts down for the night. Computers or printers left on all night still draw power and multiply by the number of devices or machines you are powering. Pulling the plug could save a lot of cash.
Holding open house events can be a great way to draw in new customers and solidify relationships with current ones, but these can be an expense to the company. Consider looking for partnerships or sponsors within the community to help reduce the costs. A partnership brings exposure to both companies, making the event a mutually beneficial marketing event for your company and theirs. A restaurant might be willing to donate the lunches or refreshments, or a hotel may be willing to rent out their conference room for a reduced rate. It never hurts to ask.
Not every business will be able to use telecommuting to save costs, but if it’s possible with your company, consider giving it a try. Not only have research studies found that telecommuting increases productivity, but it also has the potential to save you thousands of dollars in lease fees, utilities, and other overhead costs. If possible, give your staff the option to work for at least part of the week, as it could alleviate some of the financial burden without completely disrupting your operations.
Hanging onto cash in the business environment can be difficult, given the different elements of operations that demand significant resources. However, implementing some of these tips can help you reduce the amount of money going out while still being able to focus on bringing more money in.