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How to Save Money as a Small Business

Scott Bilker Scott Bilker is the founder of DebtSmart.com and author of the best-selling books, Talk Your Way Out of Credit Card DebtCredit Card and Debt Management, and How to be more Credit Card and Debt Smart. Receive the 5-Year Loan Spreadsheet when you subscribe to his email newsletter.

Any small business owner needs to optimize their budget. Spending too much money is one of the easiest ways to cause a business to struggle to survive. This is why it’s important for business owners to look at ways to make savings as they carry out the day to day running of the business.

These savings help to improve cash flow which is vital in ensuring that essential expenses, such as purchasing supplies and paying staff wages, are met. Many business owners make use of short-term cash flow assistance from time to time, but overall the aim is to ensure that cash flow is successfully maintained by making savings and budgeting effectively. So, how can these savings be made?

Have a solid budget in place

One of the most important tools for helping to save money in a small business is a solid budget. Creating a budget means that the owner knows exactly what money should be allocated to each area of the business. Monitoring the budget on a monthly basis means that any overspends can be identified and expenses can be reduced accordingly.

Make best use of technology

Making use of the technology that exists makes processes more efficient. This increased efficiency leads to significant savings. Examples of this are:

  • Using teleconferencing facilities to hold meetings with staff and clients who are at other locations is a lot more cost effective than travelling to meetings, or paying expenses for clients to travel.
  • Invoicing clients online in order to save money on producing and posting invoices. Online invoicing also makes it easier to keep track of payments and speeds up the invoicing process.
  • Tracking time in a business. Seeing where time can be saved helps with making efficiencies, thereby saving money.

Stop using paper

Paper is a valuable resource that should not be wasted, so it makes sense for a business to be as paperless as possible. A paperless environment also provides several other benefits for a small business.

  • Reduction in cost of paper.
  • Less ink required.
  • Less need for mailing services to be used.
  • Less storage required.

These benefits can lead to significant savings over time.

Look at alternatives to a traditional office space

Renting office space is one of the biggest expenses that a business can have. There are alternatives to a traditional office space that can reduce these expenses. Business owners can consider:

  • Using a shared office space.
  • Setting up an office at home.
  • Optimising space so that less floor space needs to be rented.

It’s possible to save a large amount of money by making different office arrangements, so it’s worth investing the time and effort to make the change.

Use open source software

Software is essential in operating the systems needed for running a small business. However, there are alternatives to paying out for expensive big name software options. Open source software is free to use and business owners have access to a whole open source community whose members can provide advice and support about effective use of the software.

Having a reliable budget to work from, making use of technology and open source software, and moving towards a paperless environment, can all lead to vital savings for a small business.

This entry was posted in Budgets, Earning Income. Bookmark the permalink. Read more articles by Scott Bilker. (Also see articles by all authors and articles in all categories.)

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