Penny Pinching: Easy Ways to Reduce Costs as a Small Business
You don't have a huge bankroll as a small business.
You are likely operating on a shoestring budget while you try to grow your customer base and your profits.
You simply can't afford to make any mistakes in your budgeting as you can easily find yourself in the red.
Fortunately, you don't have to have a huge, venture capital fund to be successful. All you need is some business savvy and the ability to make some smart financial decisions to make your business a success.
Here are a few easy ways you can reduce your costs as a small business:
Sign Up for Invoice Factoring
Often, you find yourself in the situation that you are cash poor. You may have had a great month and provided services to a variety of new customers, but you won't have the cash from those services until your customers pay their invoices.
Your actual payments can sometimes lag behind your invoices for several months, creating a deficit of many thousands of dollars. Factoring services for a small business aims to close this gap so that you have the cash you need.
Factoring services essentially buy your invoices. They give you the cash for the invoice, and when customers pay for those invoices, the factoring service collects the payment.
By having this cash in hand, you will have the ability to take advantage of investment opportunities that can grow your business or jump on sale prices for merchandise or facilities needs, helping you to save money.
Maximize Tax Credits and Deductions
You may feel like you have more taxes to pay as a business entity, but you also qualify for more tax credits and deductions. It is very important that you work with an experienced accountant who can help you find all the opportunities for which you qualify to maximize your tax savings.
Look for an accountant who has experience working with businesses like yours and who has a reputation for being aggressive in finding ways to help businesses save. You can ask your colleagues for recommendations, or you can search online to see what others in the business community have to say.
You can also hire an accountant to review your past returns and file an amendment if more credits and deductions can be found.
Work with the Right Vendors
Whether you need to buy wholesale products to stock your shelves or you need vendors to provide services for your business, such as paper for the copier or water for the coolers, there are always opportunities to save. You can either shop around to find a less expensive vendor or you can negotiate with the vendors you have for lower prices.
Right now, the economy is on the upswing, but many industries are either still struggling or just not quite where they would like to be. Your vendors are hit by these same economic conditions, and many would be much more willing to negotiate a lower price with you than to lose you as a customer. Even if you can save just 10 percent off your services or goods, that will add up if you can get it across the board.
Take Advantage of Low-Cost Marketing Channels
The Internet has opened up a world of possibility for small businesses to get the word out about their products and services. While you can certainly pay thousands of dollars per month for an SEO consultant and online marketing strategy, you can also create a campaign that gets results for very little or even no money.
A lot of marketing success today comes from establishing a strong content marketing strategy as it is. Whether you're creating new written blog content, slide shares, ebooks or you want to make an infographic, the production costs for all are much lower than they used to be even 5 years ago!
You can maintain a website and blog for just a few dollars a month. You can open up accounts on dozens of social media sites for free. You can host contests and giveaways for no more than the price of the product or service you are offering.
Your marketing efforts aren't limited to online. Even hiring a sign waver or costumed promoter can get you a huge return for very little money.
Focus on low-cost marketing channels with huge impact to get the word out about your business and help it grow.
You don't always have to hire a full-time employee with benefits and health care to get the services you need. In many cases, you can hire a freelancer or consultant to get what you need and save a lot of money.
For example, you can hire a marketing consultant or a freelance writer instead of hiring an in-house marketing staff. You can hire a management consultant instead of an in-house guru. You can hire a freelance grant writer as needed instead of having someone on staff year round.
There are many things you can outsource, and these consultants will save you thousands of dollars on the traditional perks you would provide for an employee.
There are many more ways for you to save as a small business. Be creative and think outside the box to keep your operations trim while maximizing your profits.