Nearly every entrepreneur experiences a period in their business’s life cycle when money is tight and they are struggling to keep the doors open. Whether you are just getting your start-up off the ground or an established business owner proactively looking to be more cost-conscious, operating with a thrifty mind-set can save your company thousands of dollars.
Here are four methods of cutting expenses. Though some seem like mere penny shaving, the savings do add up. Most importantly, none will put your business at an operational deficit.
Get smart about energy use. It may seem like a big effort for small savings, but upgrading light bulbs to LEDs, insulating windows, and implementing other energy-saving practices does translate to much lower utility bills. Companies that depend on a fleet of cars or trucks can take similar steps to cut gas usage and boost mileage.
Take a hard look at “extras.” In the excitement of launching a new company, or following a particularly good year, it’s tempting to reward yourself and your employees with fancy perks and bigger budgets. But the smartest philosophy for long-term success is to establish consistent, financially conservative behavior and stick with it. Allow personal handheld devices only for those who truly need them to do their job, and tighten the reins on expense account indulgences, like frequent sponsored happy hours or team “morale” lunches out.
Maximize discounts. Many suppliers offer discounts for paying invoices in advance of the due date. Review your agreements for potential savings and make it a habit to get those checks out early. If your business is travel-based, sign up for frequent flier and business account programs with your preferred carriers to earn rewards that can be turned into future savings. Other companies can cut expenses by buying supplies in bulk and sourcing equipment and furniture from secondhand dealers.
Renegotiate service contracts. Contact your telecommunications and Internet providers to review your plans and negotiate for lower rates. Plans change regularly, so a business that has had the same contact for a year could definitely be in a position to cut those expenses.
These four ideas will get you started, but to truly maximize cost-saving tactics, try going over your financial statements with an accounting professional. Diving into your books in one of our regular success planning sessions will go a long way towards identifying a few easy, and simple, ways your business can quickly save you money without hindering your company’s performance.