Business Money Saving Tips - Ways to Save Money as a Small Business Owner
Have you just opened up a small business? Are you worried about making it successful? Owning and operating a small business is definitely difficult, but it is manageable as long as you follow some smart business money saving tips. Keep reading for a few simple tips that can make or break your business.
Are you one of the over 30 million small businesses in the United States? If so, congratulations! You’ve taken on one of the toughest and most rewarding endeavors a person can do.
Whether you’ve opened up a passion project or you’re an entrepreneur with a great new product, you’ve got your work cut out for you to make your business successful. In fact, 20 percent of small businesses fail in the first year with 50 percent failing after 5.
One of the best ways to ensure that your business will be successful is to evaluate your finances at the beginning of your business’ life and continually checking no them. Business money saving tips can truly mean the difference between success and closing your doors forever.
We’ve compiled a list of simple tips that will help you learn how to save money as a small business owner. Let’s get started...time is money, after all.
Ditch the Permanent Offices
This won’t be relevant for everyone, but it’s a great tip nonetheless. If you’re just starting out and have only a few employees, you might not need to be paying the hundreds (or thousands!) of dollars that it costs to rent or buy office space. This is especially true in large cities where office space can get crazy expensive.
The way to save the most money would be to nix your offices altogether. There are benefits to remote work and many companies operate completely remotely with no office space. However, if having an office is important to you for meetings, client interactions, or simply working together with your team, coworking and shared office space is an excellent option.
Ben Gunther is the founder and owner of the Business District, which is a coworking space Boston professionals have loved since they opened in 2016. He says they’ve seen such great success with their shared office space Boston workers love.
Why is this concept so successful? Gunther says it’s because it gives companies the professional workspace they love at a significantly lower price compared to traditional office leases. Not only that, but it’s on-demand office space: it’s there when and if they need it. IT can also give businesses a great city-centered address that can elevate their status as a company without the high price of traditional office space options.
Outsource Your Needs
Hiring freelancers and outsourcing your needs instead of hiring full-time employees can save you thousands of dollars per year. It’s estimated that a full-time employee will cost the company about 1.25-1.4 times their salary. For example, this means that an employee with a salary of $50,000 will actually cost the company about $70,000.
Outsourcing your needs to other companies and freelancers can save you an estimated 17 percent of your business expenditure. That’s a huge amount, especially for small businesses where every penny counts. Many businesses outsource to other countries where the pay is significantly cheaper for great high-quality work.
Interns Are Your Friends
Speaking of saving money based on adjusting employees and workflow, interns are an awesome resource for growing businesses. Hiring high school and college students in unpaid internships allows you to essentially get work done without paying any money.
The intern will gain valuable experience, learn about your industry, and reduce your overall costs. Instead of hiring an employee, paying salary, benefits, etc, the intern can work for free (or at a much lower rate).
This also gives you the chance to teach the intern a lot about your business, which opens up the door for them to be hired as an employee down the road with them already being onboarded and having experience with you and your business.
Lighting, powering computers, plugs, coffee makers… all use up a ton of energy in your business over the course of a year. Understanding how much energy you use and where you can reduce that energy use can save you a ton of money in the long run.
An energy audit performed by an energy or power company can illustrate to you exactly how much energy and power you’re using. It can also show you specific areas where you can reduce that use and improve your energy efficiency. All of this will reduce your power needs and lower your energy bill.
You can also look into ways to go green and receive rebates or incentives to put money back into the business.
Create a Budget, Stick to It, and Review It Often
These are just a few of our business money saving tips that can help you save money as a small business owner. The most important thing, though, is making and sticking to a budget.
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ABOUT THE AUTHOR
Ben is an entrepreneur with a passion for innovation and business. He's been a part of numerous companies over his career, and you can find his latest venture here.