If you are a small business owner, setting aside money for emergencies should be one of your most important business strategies. When the unexpected happens, as it always does, a reserve of money will help you manage the situation calmly and without altering anything else going on with your business.
It may be difficult to know where to begin when it comes to balancing savings, especially if you are the sole proprietor of a business or only have a few employees. The following eight ways to save money are meant to help you manage your business in the best way you can.
Keep a Paperless Office
One way you can save money is by drastically reducing your paper use. Instead, go paperless and conduct all of your business online. Paper, ink, and printers take up more space, and eliminating them will save you a significant amount of money each year. In addition, hard copies are more easily lost and harder to share than documents stored digitally. It may seem like a minor change, but going digital can make savings easier for your business.
Use Electronic Invoicing
Similarly, you can send invoices to your customers through email instead of mailing them hard copies. This strategy can cut down on the amount of money you spend on paper, ink and postage. Plus, with digital invoices, it becomes easier than ever to sort by which invoices have been paid-and which are overdue so that you do not accidentally miss out on money.
Be Smart About Banking
One overlooked way to save money is to avoid banking fees. These fees, which are trending higher and higher as banks face their own rising requirements, can result from anything from bounced checks to using ATMs and debit cards. If the additional costs of banking get too steep, consider moving to a different bank. You should also evaluate whether you are most suited for a business account, which may offer more flexibility for your needs and lower fees overall.
Lease Instead of Buying
This practice can save money by helping you avoid having to pay a large sum all at once when you buy a piece of equipment. Many leasing plans can also help you save money over time by taking care of upkeep costs such as repairing broken equipment, upgrading to a better item, and performing regular maintenance.
Check for Discounts
Many suppliers offer discounts on their products to businesses who meet a series of qualifications. These deals could take the form of costs marked down by over 50%, no interest on your loan or monetary rewards for submitting your payments quickly. Getting these discounts is as simple as asking the company if they are offered and if you qualify, or changing a few things about your financial system so that you are eligible. Balancing savings often comes in the form of curbing unnecessary spending, not just nesting extra money in an account and leaving it alone.
Get Cash Right Away
Another way you can save money is by requiring customers to pay with cash if it is feasible. Not all small businesses will operate in a way in which case makes sense, but for those who can, it’s a powerful way to save money. This will enable you to keep from spending extra on collecting what customers owe you in credit, because processing fees can eat into profits over time.
Bundle Your Services
Don’t buy your internet, phone, cable and fax services separately. Many providers have bundles that combine several of these into one discounted plan. If you need all-or even most-of these services, you can route some of the money you would have spent on a more expensive spread into savings instead.
Regulate Company Credit Cards
To avoid employees making incorrect use of their company credit cards, you can educate everyone on the correct usage of the cards, set up alerts and limits, and keep a close eye on your business’s spending each month. This will help you avoid large credit card charges that should not have been made but cannot be undone.
Balancing Savings Is a Multi-Part Act
As a small business owner, it is critical that you maintain adequate savings to help your business weather tough times or unexpected expenses. You can do this by implementing the strategies above, which include reducing unnecessary spend and routing extra money to a rainy day fund. If you need additional guidance or suggestions about ways to boost your savings as a small business, the experts at Inflection Advisors would be happy to help. Reach out to schedule an appointment to get started.