Did you know that in the United States, less than 40% of all small businesses are considered to be profitable? For the rest, they either operate on a break-even basis, or they are not earning any profits at all. The opposite of this is that around 65% of new jobs in the US for the past fifteen years have been generated by small businesses.
What do these statistics mean? They simply show the important role played by small-scale entrepreneurs in the economy. Although there are some small companies and mom-and-pop establishments which fail to capture the fancy of the general consuming public, the ones who are successful do contribute a lot in the industry.
Aspects of Running a Small Business to Save Money from
Now, if you are a small business owner, profitability should be your number one concern. Of course, this should be combined with offering your clients good quality products or services. Whether you’re a manufacturer of goods or a deliverer of a specific service, you should make sure that it is of good quality – but without sacrificing the operational costs that you are spending on.
How can you create that delicate balance between the two? If you would like to deliver superb-quality goods and services to your clients without having to charge your customers too much for it, there are certain aspects of running a small business where you can save money from. This includes:
Let’s say that you are running a manufacturing firm in North Carolina. You have a group of five employees who are able to come up with the desired number of goods throughout the year. However, there is a season when the demand for your products increase.
Instead of hiring additional regular employees who would be manufacturing lots of products during the peak months and not doing anything during the months where the demand is not that high, you can save on manpower instead by hiring part-time employees. Outsourcing the work is also a good idea for you to save on costs.
The accounting and payroll department
Yet another aspect of running a small business that you can outsource is accounting and payroll. There are plenty of offshore and in-shore companies that offer accounting and payroll services. What’s good about going for this option is that you would not have to pay as much in hiring a regular employee who will solely do the payroll and accounting for you.
Since the salaries of employees are done close to the pay dates only, you simply need to hire a company which specializes in offering accounting and payroll services. They would even have a specialized system that automatically double checks figures, so you can rest assured that any discrepancies are immediately dealt with.
The administrative department’s office
The big difference between small and big business owners can be seen in something as simple as the office. If you’re the CEO of a huge conglomerate, you would have a fancy office with an excellent view of the city in a high-rise building. On the other hand, if you are the owner of a small-scale business, you would have a modest but professional-looking office.
You can even turn a room in your house or the manufacturing firm into your official quarters. As long as you have somewhere professional-looking to welcome clients in, you can save a lot of money on office space renting expenses if you are a small business owner.
Taxes, office supplies and other aspects of running a small business
Small business owners can also save money on taxes, office supplies and other aspects of their daily operations. By doing a bit of research and scrimping where you can but without sacrificing the quality of your services or production, you can save money accordingly.
Ways to Save Money for Small Business Expenses
Now that you already have an idea about the different aspects of running a business where you can save money from, what are the specific things that you can do to actually save?
Whether it’s something as simple as buying office supplies or something bigger like hiring additional manpower, there are many ways for you to save money on small business expenses including the following:
Use laptops instead of standard desktop computers
By simply using laptops instead of the office standard desktop computers, you will spend as much as 90% less on utility bills. You can even look for cheap tablet computers that your employees can use whenever possible.
Unless the nature of your work has something to do with design which requires huge LCDs or multiple screens, you will save a lot of money simply by using laptop instead of desktop computers.
Ditch the landline!
When was the last time that you actually used a landline phone to talk to a client? This technology is slowly being phased out so if you still have a landline telephone subscription, now is as good a time as any to get rid of it. You are not really doing yourself any favors by adding unnecessary expenses to your already long list of bills to pay as a small business owner, so ditch the landline.
Make sure that you have fast, stable Internet connection
The alternative to calling clients and customers using a landline phone is subscribing to a fast, stable Internet service provider or ISP. Through it, you can easily make calls, browse through websites or download work-related files. You can also maintain your very own website, which every small business owner cannot do without.
Think twice before you print
One of the biggest wastage inside a typical office is actually printed material. At the end of a working day, almost 40% of the recently printed documents end up in the recycle bin.
To prevent your employees from wasting precious ink and paper, ask them to think twice before they print. Use both sides of the paper, make sure that you have an ink-friendly font, and review any mistakes on the document before hitting the Print button.
Maximize the natural light coming into your office
Another way to save utility bill costs as a small business owner is to design your office in such a way that as much natural light is coming into the interior as possible. During the day, open all the windows so that you would not have to flip on the switch of your indoor lights.
Implement strict rules on spending petty cash
If you’re running a business from home, there is a tendency for you to spend your office’s petty cash on the pizza which you had delivered for the kids during dinner. Resist the temptation to combine your personal and work-related expenses.
Those who are not running their business from home should strictly implement rules on how petty cash should be spent. As a small-scale entrepreneur, every penny that you can save will help a lot in reaching your short-term and long-term financial goals.
Hire student interns whenever possible
Have you ever thought about hiring on-the-job trainees or interns? Depending on the industry you’re in, there are ways for you to take advantage of free labor. This is in return for the training that the interns will get.
Build a solid reputation and establish yourself as an authority in the industry so that you can have college interns work in your office for school credits. Not only will this help you save money on payroll, but it will also help boost your productivity in the workplace.
Always bargain with suppliers
Even huge conglomerates know that the best way to increase profit is to bargain with suppliers. Master the art of bargaining so that you can get your raw materials at discounted rates.
Establish solid business relationships for cross-promotional purposes
If you’re a small scale entrepreneur, you may not necessarily have the budget for TV, radio or even print ads. Your best alternative to spread the word about your brand is to use online advertising.
For this, you can also use your reputation in the industry to build a cross-promotional ad campaign. You can strike a deal with another business owner to mention your brand – which incidentally works with their own products or services.
If you must go on business trips, look for discounted fares and accommodations
You might be surprised at how accommodating some airline companies and hotel owners are once they learn that you are a business owner attending a conference or meeting somewhere else. Ask for discounts when booking business trips, or even find a sponsor who can send you on your way for free!
As you can see, there are numerous ways for you to reduce your operational expenses as a small business. Be it something as simple as cutting back your utility bills by using as much natural light as possible, to something as complex as building a cross-promotional partnership with another business owner for advertising purposes – the possibilities of how you can save money for small business expenses are practically endless.
Start applying these tips now, and watch your business expand in no time at all.