For the majority of small business owners, cash is most definitely king. In hopes of increasing their bottom line, business owners often pay themselves much less than they deserve. The truth is, you have to spend money to make money. That being said, there’s no reason why you shouldn’t be saving wherever possible. While some tips work better than others, here are a few you can implement right away and start saving.
1. Bootstrap as long as you can.
In an era of endless technology and knowledge, it’s probably “been done before”. Just because you have competition, doesn’t mean you’re too late. There’s always room to find your niche and provide value where your competitors can’t. This is actually a great way to save yourself time and money.
Whenever possible, look to work with larger companies and utilize their pre-existing technologies or infrastructure. You can either swap services or create a revenue-sharing agreement in exchange for access to their services. Ideally, they will allow you to white-label their products so you can create an original brand presence. This strategy will surely save you thousands and give your business time to build out your own products and or services.
2. Optimize your purchasing power.
Taking advantage of group buying and collective purchasing is a great way to save cash. By joining these groups you’ll have access to discounts and exclusive rates on office supplies, hardware, business travel, and much more.
There are plenty of group buying services you can utilize based on your particular business needs. If you’re a non-profit, ThriveGPO provides a great group purchasing tool. If you’re a smart business owner, you’ll never buy alone.
3. Barter your way to growth.
If you’re looking to avoid cash outlays or unload slow-moving inventory you can always look to swap your products and services for others. Bartering with other companies can be time consuming, so if you’d rather not bargain with other companies directly you can always hire a commissioned barter broker. Otherwise, you can join a commercial barter club or exchange.
The National Association of Trade Exchanges (NATE) is a registered clearing house for member exchanges nationwide. NATE essentially allows business owners to swap any product or service with anyone. When a sale is made, participants will often receive trade dollars for their goods and services. Trade dollars are brokered across cities nationwide under NATE.
4. Get your business credit card rewards.
If you haven’t done so already, it’s a good idea to apply for a business credit card. Since issuing banks assume business owners will spend more on a business card than a personal card, the rewards tend to be much more enticing. According to NerdWallet, here are the best small business credit cards of 2017:
When you redeem your credit card rewards, you should also look to redeem in the form of a gift card. Companies often times offer gift cards that you can purchase with credit card rewards points. From a dollar per points perspective, you’ll get the most bang for your buck using this strategy. If you know you’re going to need to make some big purchases on office supplies, look to purchase a gift card for Ikea for example. Using these simple but effective strategies are a great way to save much needed cash especially on larger purchases.
5. Free trials and consultations.
There’s no better way to save money than to get a service for free. Instead of investing large amounts of money in enterprise software for your business, you can find much less expensive SaaS tools to meet your needs. These services often provide free trials, some as long as a month. After the trial period is over, they’ll typically offer tiered pricing that allows you to pay as you scale your business. Whether it’s a payments solution, CRM software, or simple accounting tools, you should always start with a free trial.
Free consultations are very effective when seeking legal advice. Some business attorney’s charge as high as $600/hour and bill you to the second. Typically, a lawyer will give you about 30 minutes to even an hour of time as a consultation with the assumption you’ll choose them as your legal council. If you’re just looking to get a few questions answered, use a few attorney’s and get a few consultations. If you use this trick with three or four attorney’s you’ve just saved well over $1000 in legal fees.
6. Review your expenses quarterly.
Generally, you should be well aware of your expenses at all times. However, it’s best to do a full analysis quarterly to determine which expenses are necessary and which aren’t. Software that you used last quarter may be obsolete to your business now, so you’ll want to cancel that subscription. It’s easy to forget about all the various software and business tools you’ve signed up for over the years. It’s good to “trim the fat” each quarter so you can make every penny count.
Regardless the size of your business it’s very important to stay on top of your financesand be frugal. Especially for smaller companies, your growth depends heavily on how your dollar is spent. If you implement these six strategies you can save your business thousands of dollars each month, so get out and build that business!