Bring in more business. Increase profit. That’s the formula to business success, isn’t it? As a small business owner, you know how to take care of your business. And when it comes to your business’s finances, you know that it really pays off (literally) to find new ways to save money.
With these 9 cost reduction ideas for small businesses, you’ll learn about some places where you can save BIG money. While every other business out there is one track-minded when it comes to the way they see success, you’ll be looking at the bigger picture. Your competitors will be overlooking these expenses, but you’ll be getting the best services for the best prices. These 9 cost reduction ideas were made just for you: the small business owner who loves to save.
The Institute for Research on Labor and Employment at the University of California at Berkeley reports the average cost to replace an employee for all categories of workers stands at about $4,000. This includes finding them, hiring them, and training them. Not to mention sick leave, vacation time and insurance. As a result of this, many companies are migrating to cloudsourcing, a tool that has positioned small businesses as competitors once again in the world’s marketplace.
Cloudsourcing entails hiring qualified professionals who work remotely for a fraction of the cost of traditional in-person employees. The idea is that some of the most skilled professionals prefer to work for themselves, so they’ll post their portfolios on sites (such as Freelancer or oDesk). You can hire them for a set period of time without ever having to add them to your full-time payroll.
Onboard some interns.
When remote workers are out of the question, bring on some interns. Call your local college, university, or trade school to ask about intern programs and similar opportunities. Schools are always looking for on-the-job resources students can utilize as experiential growth. Some schools even offer students school credit as an incentive. You as the business owner can even choose to give them a stipend or some gas money at the end of their term. That way you’re still cutting costs by not actually hiring someone, but you’re giving an incentive to get the work done efficiently.
Even bigger companies cut costs on ad spending by including advertising materials in other mailings. Point-of-purchase businesses offer a unique opportunity to tuck coupons, newsletters, and other promotional fliers in the bag with customers’ purchases.
Get to know your neighbors.
Split advertising and promotion costs with neighboring businesses. Befriending your neighbors sometimes means shared mailing lists, distribution channels and suppliers. Hey, sometimes it pays to be a good neighbor. Go say hi.
Offer expert advice.
If you’re in a specific business and you have valuable insight to offer, utilize your PR skills to teach a class, speak at a meeting/lecture, or write an article for a local paper. You’ll look like an expert in your field and it’ll generate low-cost attention for your business. That’s PR 101.
Eliminate finance charges.
Too many small business owners spend hundreds — even thousands — of dollars on unnecessary expenses, such as late loan payments, membership fees, and pesky credit card processing fees. First of all, stay on top of your bills. There is really no excuse for late fees if you’ve got the money, especially with the advent of auto billing and alert calendars. Second, you need to shop around for another credit card processor.
Get better rates and negotiate.
It’s the same idea with other areas or services (such as shipping) that you incur as a business owner. Can you get a better rate by just doing some research? Shop around and find a better deal because chances are, you will find something much better than what you’re settling for. Then you can talk to your current vendor to negotiate your rates. Your vendors want to stay in business too, so many are willing to negotiate lower prices to keep your business. And if they won’t budge, “sayonara” because you found a better deal anyway!
Fattmerchant eliminates the fees and gives you access to direct cost credit card processing. Either switch to a processor with no markups and no fees, or find one who will eliminate them for you because fees really are unnecessary and you shouldn’t be paying them. (Take it from the experts.)
Buy used equipment or get free equipment.
Avoid the big upfront costs when purchasing equipment by looking for used sales. You can usually save more than half on used computer equipment, copiers, office furniture, etc. by turning to auctions and newspaper classifieds for your business’s essential equipment. Just make sure it looks good before you agree to purchasing it.
It’s also possible get free equipment from your vendors! With Fattmerchant, you get a free credit card terminal with our pricing plans. Now is that something your current processor would do?
Offer electronic invoicing (or e-invoicing) to eliminate the issue of print and postage costs. Send an invoice to their emails through that neat new thing called the Internet, so customers can get their invoice instantly and directly, (and so you can save that money).
We came up with these 9 tips to help your business save wherever it can. From the little tweaks to the big changes, follow these cost reduction ideas to really buckle down and make some more money this year. When you analyze your profit and loss doc and your cash flow statement this quarter, you’ll really notice a difference. Especially if you switched credit card processors (to us).
At Fattmerchant, we offer you a uniquely transparent credit card processing solution. Get your Business Savings Assessment now to find out just how much FATT savings will go right back into your business — and not into your current processor’s wallet.