Looking for new ways to save money as you grow your business? You’re in good company. We’ve seen a lot of costly mistakes in our day, and we’ve compiled a list of eight simple business money-saving tips you can use.
Learn to Pivot
Never stop looking for new opportunities to serve your existing client base or expand into new markets. You won’t need to reinvent your business every time; just reframe what you’re already doing. Here are some general options: Consider what additional products or services your current customers might be interested in. Create new offerings by bundling existing products or services in new ways that add value. Find other demographic groups who may benefit from your products or services but are not currently being targeted. Look into selling in new locations, whether in other cities or provinces. Enhancing customer service can differentiate your business in a competitive market.
Keep Your Overhead Costs Practical
Many startups make the mistake of investing too much money in overhead costs like modern office spaces and flashy computer hardware. Rapid growth will require functional office space for meetings and a growing staff, but save the pool table and Italian espresso machine for when cash is flowing. Here are some practical ways to control overhead: Use software to automate routine tasks like accounting, customer service, and inventory management to reduce labour costs. Consider outsourcing functions like IT support, payroll processing, or marketing to companies that can offer economies of scale. Move to a smaller office or negotiate better lease terms with your landlord. Allowing employees to work from home can reduce the need for large office spaces and potentially lower utility and office supply costs.
To avoid incurring significant capital costs, consider Bring-Your-Own-Device programs where employees are paid an allowance for using their own computers rather than providing them with one owned by the business. People tend to take better care of a device they own, so you will save on repair costs that you would otherwise incur.
Review and Plan Finances
Conduct frequent reviews of all business expenses to identify and eliminate inefficiencies. Create a strict budget, planning for future expenses to avoid unnecessary purchases.
Improve Inventory Management
Use inventory management software to track inventory levels and reduce excess or obsolete stock. Use Just-in-Time Inventory to minimize inventory costs by receiving goods only as needed in production or service delivery.
Track Personal Investments
Many business owners will invest a significant amount of their personal money into getting their company off the ground. You must track all of your investments in your company because you’ll be able to take the money back out of the company tax-free. Work with your bookkeeper to make sure you have a system in place to track these contributions that you make to the business.
Get Professional Tax Advice
Sure, it’ll cost you upfront, but having a professional tax advisor can help you avoid adverse tax consequences down the line. Advice from a tax advisor can also help you make sure that you are taking advantage of tax deferral opportunities and eligible tax credits and deductions.
Invest in Tools That Help You Work Smarter
Ditch the manual Excel spreadsheets and invest in tools and software that help you run your business. Take advantage of free trials and test multiple products to find the best tools for you. All businesses need a robust accounting platform, and we love working with Xero’s cloud-based software. It’s flexible enough to suit freelancers through to mid-size businesses, allows for multiple time-saving integrations, and lets you access your financial data from anywhere.
Document Your Processes
Documenting your internal processes helps you identify any inconsistencies and spot where you are losing time and money. Having a documented process also reduces the risk of needing to rebuild processes should an employee leave suddenly.
Don’t Be an Island
Simply put: make friends. Network. Ask for help. The business community can be more supportive than you may think! Other small business owners are often prepared to share resources, advice, and clients. Similarly, consider opportunities to help out other entrepreneurs—we build each other up.
Outsource What You Can’t or Won’t Do
Is there an element of running your business that you don’t enjoy or don’t understand? Don’t do it. Outsource non-core functions of your business, such as bookkeeping, social media management or IT support.
As a business owner there’s never enough time in the day, so when you spend your time wisely, you’ll not only be happier and more focused, but you’ll end up building a leaner, more efficient business.
