Running a business is expensive. Luckily, if you’re a small business owner, there are a number of steps you can take to save money, from DIY problem solving to collaborative ordering with other companies.
Here are easy ways to avoid unnecessary costs and keep that money in your pocket.
1. Buy Second-Hand
Equipment costs often seem like an unavoidable expense as a business owner, especially if you want to buy the best. But really, how much worse is last year’s “best” compared to the updated equipment being sold this year? Check out the market and see if anyone is selling their used equipment. It’s especially worthwhile to contact big name chains in the area to see if they are phasing anything out or replacing functional equipment. The cut rates you can get on used items can save you a lot of money.
2. Hone Your Repair Skills
At the same time that buying used can save you a nice chunk of change, it’s important to remember that you’re running a risk with such transactions. Older, used equipment may be prone to breaking, and repairs can add up quickly. Replacement costs will add up even faster.
However, whether you’re a restaurant, a landlord or property manager, or a landscaper, you can save your company money if you know your way around a toolbox. Hone your repair skills and you’ll find yourself bypassing the middleman that you otherwise would call to fix your equipment. All you need are the tools and a source for parts. Doing the labor yourself is a big money saver.
3. Share Custodial Duties
Cleanup is an unavoidable part of any business. Larger companies and even many smaller ones often hire custodial staff to take care of the day to day operational cleaning. This is also often an unnecessary expense, though, since basic custodial duties can be handled as they arise, or as part of the shift work of all employees. Train your staff on how to give your shop or your vacant apartment the white glove treatment.
Once everyone knows the protocols, upkeep becomes routine and can be spread across employees so that no one carries too much responsibility for cleaning.
4. Collaborate With Your Competitors
One of the biggest advantages that large companies have over small ones is their ability to buy in bulk. And not just bulk like we all get at Costco, but really big orders that are significantly discounted. Unfortunately, small businesses are the ones who tend to have less disposable income and need that discount more, but often they don’t qualify – but there’s an easy solution to this problem.
If your business is struggling to place large enough orders to fully benefit from cost cutting discounts, try collaborating with other companies to place group orders. This is when it really helps to know your competition, because for these purposes, they might not be your competition at all. Rather, companies that are in the same industry are more likely to need the same supplies. Chat up the other local companies and see what other small businesses might make good partners for bulk ordering.
5. Learn To Barter
Many of us forget that barter is a legitimate form of exchange. We simply don’t live in a society that prioritizes exchange of goods and services for other items of equal value or really for anything other than money. However, if you’re a small business, barter can be a really valuable cost cutting tool. Your expenses for a service are less than what you charge customers. Take advantage of this fact and see who might be willing to make a fair exchange.
For example, maybe you really never learned those repair skills because you’re a caterer and that just isn’t in the cards. Is there a local handyman who might need a party catered that you could work with? Could you exchange landscaping services for some locally made baked goods? With barter, the possibilities are endless. This is creative cost cutting at its finest.
Sometimes the best way to keep costs down as a small business owner is to accept certain limitations. You may not be able to get that new espresso machine this quarter because sales aren’t high enough. By doing your research, making a budget, and sticking to it, you set yourself up for financial success. It’s the business equivalent of living within your means. Try practicing these five strategies for saving money, and watch your bottom line grow.