6 Things You Can Do To Save Money in Your Small Business
Cashflow problems an age-old small business challenge. That’s why at least 30% of businesses go out of business because they run out of money.
But, as many countries head into recession after the global pandemic, it becomes more important than ever to go back to basics and set your business up for financial success.
Some business expenses are unavoidable. But, often when I'm working with a business to improve their cashflow or profit, I find a lot of money leaks. Plugging up these holes can make a big overall difference to a business's resources.
So, here are 6 quick things you can do in your business to save you money and increase your profits:
Create a budget (if you don't already have one) so that you know how much your fixed expenses are
I know - such a sexy suggestion. And I hear you rolling your eyes - because I hate budgeting too!
But, the first step to saving money in your small business, is to actually getting to know how much your business costs to operate, and looking for any money leaks.
Especially in this economy where we have such high inflation and the cost of everything is skyrocketing, if it's been a while since you've done your budget, things may have changed significantly.
It can be an easy and tempting thing to avoid doing, but creating a budget gives you so much knowledge. And knowledge is power.
Budgeting doesn't have to be difficult or time consuming! All you really need is a spreadsheet, your bank account, and an hour of your time.
Go through all your subscriptions and check for ones you don’t need anymore.
Ok, now you've created your budget, it's time to review everything and look for any money leaks. You would not believe the number of clients I begin working with who are paying for tools they don’t need. Or, paying for subscription tiers above what they need!
Here’s a quick checklist of things you can do to check you’re not doing it too:
- Open your budget and business bank account.
- Look through your transactions and consider “do I need this still?”
- Cancel any that you don’t need
- Next, consider “do I need the current plan I’m on or am I paying for features I don’t need?”
- Reduce your subscription to the one most appropriate for your business.
There’s actually also a system which can help you keep track of all your subscriptions. It’s called Track my Subs and could be well worth checking out if subscription management is a priority for you.
Look for lifetime deals on useful subscriptions
Subscriptions can be a killer on a business's monthly cashflow! So, I'm a big fan of lifetime deals where you pay once and continue to get the benefit many years later.
App Sumo is one of my favourite places to keep an eye out for great lifetime deals on software. If you can find something you need, and it can replace one of your monthly software subscriptions, then it means you can change from a monthly subscription to a lifetime deal and save bucket loads. It’s well worth subscribing to their email updates!
Two of my most used lifetime deals are my shopping cart (Thrive Cart) and my booking system (Book like a BOSS). But I use a ton of others too!
Here’s the checklist of things you can do to check out App Sumo:
- Head to the App Sumo website
- Check through the current deals to see if any of the options could replace your subscriptions
- Sign up to their newsletter and monitor their new software releases.
Shop around for your big suppliers
When was the last time you reviewed whether you're getting the best deals at your main suppliers?
For example; business insurance is one of those costly things that we all hate to pay until we need it. It’s vital to have, but, as there are so many different variations and levels etc. the company your with and the type of cover can make a HUGE difference to monthly premiums.
A few years ago my insurer wanting to put my premiums up from $150 per month to $600 per month.
I was like “whaaaatt the actual, you have got to be kidding me”!
But, we shopped around and ended up getting half our original premium. We even ended up with a type of Cyber care cover we previously didn’t have, which for our type of business was great to add.
So shop around for insurance for sure.
Other suppliers to keep an eye on are:
- Your accountant
- Your business coach
- Rent, power, phone, rubbish, water and other utilities
- Other insurances
- All your subscriptions
I encourage you not to wait until they’re going to put your costs up – because we could have already been saving over half our premium per month.
Just remember to read the policy details and actually check your policy will be swapping like for like etc.
Check your Ad, Marketing, SEO, Website Maintenance, Website Security spends:
Just like with subscriptions, these ongoing business costs can really eat into your profits unnecessarily if you don’t plan them wisely. I suggest making sure you know and understant your ad metrics! And if you don't, check out number 14 in this article here for an explanation.
When it comes to your ad spends, check:
- Do I actually have a funnel strategically mapped out?
- And am I tracking and measuring the results or getting reports provided to me?
If not, then you should be. ALL digital marketing companies should be providing you with reports at least weekly, and recommending changes so that you are optimising your spend.
If you’re not doing either of these things – it’s time to do that before you throw any more money at advertising!
Same goes for Marketing –
If you’re paying for someone to do your social media for you, but you don’t:
- Have a strategic plan and aren’t
- Measuring the results
Then I suggest that's an area you need to shine light on and learn your numbers. Because if you aren’t certain you’re getting a return on that investment, that money is not necessarily serving you well in your business.
Rinse and repeat the above for all Website Maintenance, SEO services and Website security that you might be paying for.
- Shop around.
- Make sure you’ve got the best care for your business.
- And make sure you can see where the money is going
Review your arrangements with all professional services such as your business coach, accountant or outsourced HR/recruitment…
Professional services are so valuable to every small business. They can save hours, time and heartache.
However, it’s important to review your arrangements regularly to ensure that you are:
- Still getting value for what you/your business needs
- Are paying reasonable rates compared to the going market rate
- And have ENOUGH cover for what you need
If you’re running on overwhelm, then this list of things to review might seem tedious and unappealing. But honestly, it’s so worth doing! If you can outsource it to someone, all the better!
PS. If you need to outsource see our article ‘3 top tips to successful outsourcing here’ and our free Outsourcing Checklist here.
But, whether you do it yourself, or you outsource it to a valued team member, I encourage you to make time to review everything above and potentially save your business some money!
Sometimes our money shortage in our business is about the absence of profit:
Learn more about how to create a profitable business with my free profit class:
It will teach you the biggest mistakes people make when it comes to their profitability, and how to improve your profits in 5 easy steps.
About the author:
Kat Soper is the Founder and Head Trainer of The Helpful Academy Online Business School.
Kat is passionate about helping start-ups and small businesses succeed and achieve their business goals so that they can achieve the lifestyle they desire (and deserve).