Ways To Save Money In Business
The primary success of most business is measured by one factor: the bottom line.
If you aren’t making more than you’re spending, at least in the long run, you probably aren’t achieving the success you imagined. For startups especially, finding any way possible to reduce expenses will make your journey all the more fruitful. What good is being your own boss, after all, if you can’t afford to pay your bills?
So here are 7 ways to save money in business that will add up big over time.
1. Cut back on the extras.
When you’re launching your own business, every penny counts. And the simplest way to save money is the same for entrepreneurs as it is for anyone else: cut back on your wants.
A typical budget takes into account both wants and needs. Consider some of the extras that you could do without for a few months (or forever!), and invest the savings into your business instead. These can be big purchases, like that new car you’ve had your eye on. Or they can be little expenses that add up over time, like buying your coffee out.
If you typically spend $2.50 on a cup of coffee every morning, for example, you could save more than $900 dollars a year by just brewing it at home instead. The savings go up even more if you are a multiple cups a day kind of person.
There are plenty of other ways to save money in business just by cutting back on the extras:
- Do you really need to buy that new outfit?
- Could your shoes last you another 6 months?
- Can you mow your own lawn instead of paying someone to do it?
Think of all the little costs you can cut that will add up big over time.
2. Don’t spend what you don’t have.
While taking out a business loan is standard practice for a lot of entrepreneurs, keep in mind that debt can haunt you for years. If you don’t have another source of income to provide for the payments, or if you can’t ensure that your business is going to be making enough to cover them, it’s best to avoid the debt trap.
Likewise, be wary of putting too many business expenses on your credit card. Never make an investment based on what you think you’ll be making in the future. Always make them based on your existing revenue.
3. Outsource what you can.
Hiring employees isn’t always the best option when it comes to staffing. In fact, businesses may save up to 30 percent by choosing independent contractors instead.
Eventually the time may come when it makes sense to bring on some full-time team members. But when you are just starting out, odds are good that you simply won’t have enough regular work for them.
For example, rather than hiring an employee to create and manage your business website, you could enlist the services of a qualified freelancer on a platform like Legiit. Freelancers aren’t just more affordable. They tend to require less of your time to manage and train as well.
4. Cull your monthly subscriptions.
If you are like a lot of entrepreneurs, you probably get bombarded by targeted ads and emails promoting great deals on “the last tool you’ll ever need to succeed”“. It’s completely natural to buy in to fancy tools and memberships. But, the costs can add up.
That $19 per month subscription you signed up for may not have seemed like much at the time, but when you combine it with several other recurring services you are paying for things look a bit different. So one of the easiest ways to save money in business is to go through your credit card or Paypal statements on the hunt for subscriptions that you aren’t using much or could probably go without.
5. Barter what you can.
It might sound like an outdated concept, but bartering your services can potentially save you thousands of dollars. It obviously depends on what you provide and the connections you’ve made, but keep it in mind so that you’ll recognize opportunities when they present themselves.
For example, if you’re in the SEO business, and you happen to need plumbing renovations on your home, see if your plumber is interested in trading their services for a month or two of free SEO.
You could also partner with other businesses in related industries. If you’re a content creator, for instance, you could regularly write content for a web designer in exchange for maintenance on your website.
6. Work from home.
Depending on the sort of business you are running, consider whether or not a home office would be right for you. Obviously this doesn’t work in every industry, but using your home as an office is one of the most high impact ways to save money in business.
Traditional offices come with all sorts of extra expenses. Besides rent, you’re also probably going to be paying for additional phone and internet accounts. Maybe even electric and plumbing as well.
If you designate a space at home for work, you’ll avoid these costs and potentially earn a number of tax write offs. A portion of your rent or mortgage and even utilities can count as business expenses, provided you follow proper IRS guidelines.
7. Opt for co-working space.
Sometimes working from home just isn’t an option. Maybe you’ve got kids that would be too much of a distraction. Or maybe you just can’t keep yourself motivated if you don’t physically separate work from home.
Co-working space is the perfect medium between a home office and a traditional one. Costs are significantly more affordable than your very own office space, but you get the advantage of having a place to escape to and get work done. You’ll probably meet like minded entrepreneurs as well!
A penny saved is a penny earned.
It might be a worn out saying. But that doesn’t make it any less true.
The bottom line is the bottom line. Every bit of money that you don’t spend is money that you can invest back into your business. While you have to spend money to make money, you can stretch every dollar a little farther by finding as many ways as possible to eliminate unnecessary expenses.