Your Small Business CAN Save Money

Many small businesses run on margins that are paper thin. This means that every single decision to save money can be lifesaving. Balancing the budget of a small business can be akin to tightrope walking, where even the smallest change can lead to tremors, and if you don't have the right planning, there can be a disaster. To try and stave that off, here are a few tips that can save you money.

Parcel Savings

How much time and money do you waste paying for each and every shipping invoice that comes in? If you had someone who could handle your small parcel negotiations, you could save time and money. This can give you the additional funds that might be desperately needed in another area of your company.

Go Virtual

Take a look at your staff. Which of those positions could be done virtually? Having virtual staff means that you can minimize things like office space, supplies needed for the office, and more. Even minimal savings can be a massive help in today's economy.

Set Aside a Portion of Sales

There are cash savings strategies that are quite obvious and can be employed, but there are also options that are more subtle. Begin by putting a minimum of 1% of all of your sales aside in a separate account. Every week or two weeks, increase the percentage until you start to feel a pinch. As the operating budget gets smaller, need will lead to creativity, and this can lead to you coming up with quite a few ways to save money.

Negotiate With Suppliers

When you have a struggling economy, whole ecosystems of businesses are affected - not just the small ones. Suppliers need to ensure that their cash flow continues, so they might be willing to negotiate with their prices as opposed to losing good customers. If you reach out to your suppliers and let them know about your struggles within the economy, they may be willing to work with you in order to find a solution.

Keep Cash

Owners of small companies should have a goal to have a minimum of 10% of their annual revenue in the bank at every single moment. All businesses have risks, and the higher that risk, the larger percentage of cash you need to have. That money can be helpful when it comes to making good decisions as opposed to reactive decisions based on the amount of money you have on hand.

Waste Management

During good times, we don't tend to focus on the little things, such as food waste, leases of assets that aren't being used, office supplies, etc. So, just say you have operating expenses of $1 million per year, and your typical waste is about 5% a year. If you save just 1% of this, that's $10,000 in cash. The small things can add up quickly, so try to recycle or reuse what you can in order to save money.

Office Expenses

Many businesses aren't using a lot of office space at the moment. That said, office expenses continue. As an example, some businesses might have standard monthly orders for things like office supplies or fixed expenses for internet, utilities, or other services that may not be utilized. You might not be able to cancel these things, but you may be able to get discounts or even pause the services until they're needed again.

Hopefully, the previous paragraphs have shed a bit of light on some of the lesser-known ways to save money in your small business, regardless of whether you are making certain adjustments due to your circumstances or planning ahead for the future of your company.