Saving money and cutting costs as a small business can be tricky—if you’re a startup in the early stages especially, money might be tight already.
We’ve compiled a list of money-saving tips—ways for you to trim overhead here, and increase efficiency there, until your business is on its way to better financial health.
In this list, I will cover:
- Nearly-universal tips
- Office and home business-related tips
- For those outside the U.S.
No matter your industry or location, you should be able to apply most of this advice, even if you need to tweak it a bit to suit your needs.
1. Go green
You’ve heard it before and it’s still true: going green saves green. Whether you’re running a home-based business, office, storefront—whatever kind of space your business is using, the more energy-efficient your space is, the lower utility costs you’re going to have.
So go out and buy those LED bulbs already—they can save you three-quarters of your lighting bill per year! For more information on greening your spaces, check out Energy Star, a program run by the U.S. Environmental Protection Agency.
2. Use open source and cloud computing
Every startup will use some kind of software, for things like bookkeeping and accounting, word processing, and presentations.
Sourceforge has an index of open source options. For most things you need to do, you can find an open source and/or cloud version of it. “You do not need to buy that expensive office software and servers when you can switch to a cloud vendor—Google is an example—at a fraction of the cost,” says Ali Asadi of A Profit Maker.
3. Use own-brand or generic brand goods
It’s always tempting to buy the name brand, but it’s rarely worth the money. If you’re looking at buying goods for your business, just go with generic (or as they say in the U.K., own-brand); the box may not be as pretty but the product will be the same.
4. Sponsor community events
There’s a wide range of reasons why a business may need to throw an event, but you likely will need to at some point, and they can certainly be costly.
Joining together with another business as a sponsor to support or put on an event can mean a higher quality event and more press for all involved, simply because you’re able to share resources.
5. Barter with other businesses
Especially with other businesses, bartering might seem old-school but can definitely still be effective. If you need a good or service and have something of value to offer in return, this could be a good route.
Approach these types of agreements with a spirit of generosity. Make sure you know the value of what you have to offer, as well as what you’re asking from the other business to avoid insulting or embarrassing anyone.
6. Cut down on meetings
Cutting down on meetings is one crucial way to save money. Not convinced? The next time you’re in a meeting, do some rough napkin calculations based on the number of people in the room, and the average hourly salary you’re paying them. Sometimes the results can be staggering.
Take a look at both your own and your employee’s calendars—how many hours per week are spent in meetings? Really evaluate the cost and benefits to the company. More than likely, you can cut back on some meeting time and free up time for actually getting work done.
One suggestion is to eliminate a lot of information-sharing meetings. If you need feedback on something, send information ahead of time and ask everyone to review it before you sit down to meet.
7. Hire capable employees with little work experience
Hire curious, capable people who are early in their careers. This might initially seem counter-intuitive, but people with little work experience are looking for entry-level positions and salaries, which saves your company money. Of course, there may be times when a more experienced candidate makes the most business sense, but often a solid employee with little work experience just needs a foot in the door, and you’ll find them competent and eager to do well. We all had to get our start somewhere.
Good training counts for a lot. If you do bring in employees with less workplace experience, set them up for success by training them well and checking in often to help identify and address gaps in their knowledge and experience.
8. Allow employees fewer hours
In a similar vein to the previous tip, this might sound odd at first. But there may be employees at your company who would transition to part-time (or even just four days a week) if given the opportunity.
This can be a touchy subject for an employee to bring up themselves, but if you as a business owner make it known that you’re open to shorter work weeks for those who might want or need them, this can save you from paying those full-time wages without having to lose a good team member (and their work product) completely.
9. Retain your best employees
A high performing employee, especially one who is an asset to your company culture is a valuable asset. Not only that, it’s a valuable relationship.
Costs associated with the hiring process can be shockingly high. If you have a solid team member, do what you can to keep them. Check in regularly and take the time to understand what they’re looking for in terms of career trajectory and opportunities for growth. It’ll save a lot in the long run.
10. Consider outsourcing or contracting some work
For those moments when you have smaller tasks that don’t warrant a new hire but that you just can’t add to your already full plate, Simon Slade of Affilorama suggests outsourcing, which is also called micro-contracting….