From saving on supply costs to renegotiating your rent, these simple steps can help you reduce small business expenses and build up your bottom line.
What small business couldn’t use a bit more cushion in their bank account? Improving your cash flow isn’t just about increasing sales. There are several small steps you can take to lower your business expenses and keep more cash in your account.
Chances are, you don’t even realize all of the places where your business could save a few bucks, and even the smallest changes add up over time. Start considering every dollar that goes out, and get ready to find money you never even knew you had.
Here are 10 ways you can reduce your business expenses to boost your cash flow:
Do your employees really need fresh bagels every Friday? Perhaps it’s time to treat them once a month instead? Job stability is way more important to your team than a bit of breakfast, especially in tight times. From unnecessary maintenance to little extras here and there that your business would probably never even miss, chances are there are a lot of nonessential expenses that you can cut.
This is also an excellent time to take stock of old inventory and unused equipment. Let’s be honest, does that dusty old cappuccino maker spark joy? Be brutal, Marie Kondo style. If you no longer need it, or simply can’t use it anymore, sell it for a quick and easy influx of cash.
Review Recurring Expenses
Take a hard look at all recurring expenses to see where you can trim the fat. Even seemingly minor things can add up. Are you still paying for insurance you don’t need? Services you no longer use? Outdated subscriptions? And do you really need that landline? You know what to do with all of those unnecessary expenses.
Lower Supply Costs
If your business relies on wholesale supplies, finding the best prices can dramatically impact your cash flow. Have you been loyal to the same suppliers since you started your business? It may be time to shop around a bit and see if there are any better deals out there. Did you find a better price? You can always go back to your current supplier and see if they’ll match it. If not, it could be time to move on. Keep tabs on sales to stretch your dollar even more.
Paying a full-time employee can be difficult for a small business, and the hiring process is often arduous and time-consuming. More and more, contractors are stepping in to offer a cost-effective solution to fill an employment gap. These days, freelance networks make it easier than ever to find the help you need, exactly when you need it.
Getting financial expertise can be especially challenging for a small business. Hiring a full-time bookkeeper or accountant is cost prohibitive, but the insight these financial professionals provide can often save you money in the long run. With FINSYNC’s Network, you can get matched with a financial professional for help with bookkeeping, accounting, human capital management, financial analysis and corporate strategy.
Downsize or Sublet
Whether you have office space, retail space, or both, paying for the place where you do business can be one of the biggest expenses small businesses face. If you have a lot of unused space, consider downsizing to reduce your monthly rent costs. You could also invite another small business or independent contractor to share your space in return for covering a portion of your rent. Utilizing a co-working space is another budget-friendly option.
Work From Home
If you don’t actually need physical office space, consider becoming a home-based business. Employees generally appreciate the freedom that telecommuting provides, and it’s easy to stay connected with today’s technology, from video conferencing to cloud sharing. You can still get your local team together for weekly in-person meetings, even if it’s just a standing lunch meeting.
If having a physical space is crucial to your business, and you’re happy where you are, why not try to negotiate a lower rent? You could offer to sign a longer-term lease to make it worthwhile for your landlord, especially in a favorable rental market. Even if you don’t really want to relocate, it pays to shop around for comparable spaces so you can bring any lower rental rates to your landlord’s attention.
Consolidate Your Online Tools
How many subscriptions and software packages do you pay for to manage payroll, track cash flow, invoice clients and track time? Relying on a single platform to handle all of your back-office tasks not only makes for a more efficient workflow, it can save you a lot of money.
A tool like FINSYNC offers a complete solution for payments, invoicing, bill pay, payroll, accounting, financing, cash flow management and services. Bonus: Having all of your financial data in the cloud is a great way to consolidate, always have the latest software updates, and save on IT services like data storage or an on-site server.
Bartering is one of the oldest ways in the books to save money on business expenses. Do you have excess inventory that’s collecting dust, or specialized skills to offer during a slow month? Think of what your business needs, and make an even exchange without cash ever changing hands.
For example, a design firm that’s looking for a place to hold events could offer to update an event space’s website in exchange for use of the space. A restaurant could offer to trade some excess produce for coffee from a local roaster and café. Find service-to-service bartering opportunities on Craigslist’s bartering section, or a fee-based online bartering exchange.
There are several small steps you can take to reduce your business expenses while doing something good for the environment. Let’s start with energy. Save on heat and air conditioning costs with a smart thermostat. You can also easily reduce your power consumption by turning off and unplugging computers and equipment when you leave for the day.
And what about all that paper? Print less and share documents online more to reduce both paper and printing costs. These things add up. While we’re at it, are you still sending out paper invoices and cutting checks manually? What about paying for postage to send checks through snail mail? Automate your invoicing and make online payments to minimize these unnecessary expenses.
Focusing on even a few of these 10 ideas to reduce expenses can have a dramatic impact on your cash flow. Stash your savings away in a business emergency fund, or pour the money right back into your business to take advantage of a growth opportunity.