Small business finances are just like personal finances. There are always bills to pay. There are always mouths to feed (think employee paychecks). And there are always unexpected expenses that can pop up out of nowhere and send your whole budget off the rails. And just like with personal finances, small businesses need to find ways to cut expenses and save more money.
However, the idea of cutting back on the expenses for your small business might seem scary. You don’t want to let employees go, and you don’t want to move to a smaller space or cut your marketing budget. But what options are you left with?
Fortunately, there are many options available to help your small business save money. And the best part is these options won’t make you feel like you’re sacrificing anything at all. In fact, you’ll wonder why you never thought of doing these things before. Let’s start with the people you rely on – your employees.
Cut Employee Expenses
If you need 40 employees to ensure your small business runs smoothly, then you need 40 employees. Period. But there are ways to have the employees you need without paying through the nose for them. The key is to bring in employees that may not be incredibly experienced, but that are smart, skilled, and able to learn quickly.
That means, hire people who have recently graduated, so you can pay them an entry-level salary. Bring in interns who can help lighten the load at a much lower cost than an employee who has 15 years of experience. These people will be up-to-date on all the latest technological advancements, but they won’t be set in their ways or have high salary expectations. They will be easier to train and will bring fresh ideas and energy to your business.
You can also offer employees flexibility in terms of location. Let them work remotely. This will minimize the amount of office space and equipment you need to invest in and maintain. Plus, it will give your employees more freedom to balance work with their personal lives, something more and more employees are demanding these days.
Rethink Your Marketing Approach
Times are changing, and you need to change with them. If you aren’t already advertising online, then you are missing out. Not only will you reach far more people and a much more targeted audience, you will be paying a lot less money than you pay for traditional forms of advertising.
Advertising on platforms like Google, Facebook, and Instagram can be had for mere dollars a day, as opposed to thousands for things like radio and magazine ads. Social media can increase your exposure to your customer base for nothing more than your time. Even if you have an employee on staff who can handle your marketing initiatives, you’ll only need one, and possibly only part-time.
Sweat the Small Stuff
There are so many tiny expenses here and there that can compromise a company’s bottom line. For example, employee perks, such as Friday lunch or onsite fitness classes once a week. Yes, it’s nice to give your employees something, but keep it small, like morning coffee and a tray of pastries.
Then there are the other expenses that are hidden from view but can still cost you a mint. For example:
- Maybe you can negotiate lower prices from your suppliers, especially if you buy in bulk. Or you can switch to suppliers that charge less.
- Perhaps you can switch your internet and phone services to a provider that costs less.
- You can be more energy efficient and switch to a paperless system that saves on printing costs.
- Maybe you can negotiate a lower rate of interest on business loans and credit cards.
You can also find better software deals. Software as a Service is often a better option than buying the license for everyone in your office. And if you have just a few employees, maybe you just need one license for all of them. The point is, there are always ways to save.
Paying Uncle Sam
Taxes have to be mentioned here because when tax time comes around, it is common for small businesses to be surprised by the giant tax bill they receive. Yes, you have to pay these taxes – no way around that. But having to dish it out in one lump sum can be painful. Instead, start budgeting the money for your business taxes and set them aside. This will save you having to pay the interest and penalties on late taxes.
Ultimately, if you look hard enough and are willing to make a few changes, you can cut small business expenses and save money. There are always ways to cut back. Then you will have extra money set aside for emergencies or for a rainy day. If business is booming and you end up saving a lot, you might even be able to consider taking your business to the next level.
However, nothing will happen if you don’t protect your bottom line and have a business nest egg set aside. Remember, this really is the same as managing your personal finances. Take the time to find out how you can cut expenses and manage your money better and you will be able to take financial control of your business.
About the Author
Vik Palan is the Founder and CEO of CompareMyRates.ca – Canada’s most comprehensive rate & price comparison website that allows to search and compare nearly 1000s of products & services online – including Mortgage Rates, Credit Cards, Utilities such as Cell Phone, Home Phone & Internet Plans, Shopping Deals & Coupons & Travel.
Vik Palan is also a Founder and CEO of iToolPro Systems Inc. & RateSheet.ca – Canada’s First and only Mortgage Auction Website (Now a Part of CompareMyRates.ca)
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