When you’re just starting out as an entrepreneur, money is usually scarce. That’s why you need to find creative ways to trim expenses and run your business on as lean a basis as possible. To help you out, here are 10 simple ways you can save money in all facets of your operation.
1. Use email instead of standard mail. When sending simple messages, like greetings to new customers and requests to vendors, you should use email. Most people are now happy to receive messages electronically. Save the cost of a stamp, envelope, and paper. Small costs can add up fast, so start by cutting the little things.
2. Print less. Ink cartridges, paper, file cabinets and storage space are all expenses you can easily limit in the digital age. Store the majority of your documents and data on a hard drive, scanning paper documents if necessary. Be sure to back up all of your files and protect your computers with passwords. Computers can be expensive, which leads to the next cost-cutting tactic.
3. Buy used equipment. With technology constantly improving, you can get big discounts on software and hardware that was recently replaced by a new version. Used equipment can be just as useful as new equipment, but even equipment a few months old will come at a significantly lower price. Search Craigslist, Ebay, and classified-ad websites to find deals.
4. Pay invoices early. Many suppliers offer discounts for paying invoices within the first few days of receiving them. Paying early is a great way to build long-lasting relationships with your suppliers. However, you need to have enough cash on hand to pay for orders when they come in. That’s easier said than done, which is why you should take note of the following tactic, also.
5. Reduce your inventory levels. For many companies, inventory is their biggest expense. Getting a large number of products in one shipment might seem like a good deal, but small businesses can’t afford to tie up too much of their working capital in idle inventory. To help you find the right balance of inventory in stock, you might want to use inventory management software.
6. Increase your inventory turnover ratio. In conjunction with the last tactic, you should also try to increase the number of inventory turns you have each year. Your inventory turnover ratio is the number of times in a year that you sell the average amount of inventory you keep on hand. If you cycle through your inventory more often, you reduce the risk of products getting too old or outdated before they can be sold.
7. Take advantage of low office rent prices. If you’ve grown enough that you need to rent office space, you should move quickly. The commercial real estate industry has fallen on tough times in most metro areas, and right now is a great time to negotiate a low monthly rate for your office space. Office vacancies are high, so property owners are often willing to fill their space at a discount instead of leaving it empty.
8. Use Internet marketing. Are you using SEO-optimized blogs, Twitter, and Facebook to find customers? The great thing about these marketing tools is that they are relatively inexpensive compared to print media. But they do require time. Analyze who your target customers are and decide if they’re more likely to use traditional or social media to find you. Adjust your marketing strategy accordingly.
9. Travel less. You can save a lot of time and money by avoiding unnecessary trips. Use online resources like Webex and Skype to conduct meetings with people in multiple locations rather than flying or driving to visit with them in person.
10. Hire interns. Hiring interns is a win-win situation. Interns get valuable experience, and employers enjoy low-cost labor. Interns are usually young and untested, so they might need extensive training on your software and procedures before they can get to work. Keep this in mind when weighing the costs and benefits of this tactic.
Hopefully these 10 ideas will help you reduce your costs and thrive, no matter how big or small your business is.