Benjamin Franklin stated in Poor Richard’s Alamanack that ”a penny saved is a penny earned” (the original use of the phrase precedes Franklin’s publication). Being economical or thrifty may sound like an old-fashioned strategy, but it can still pay off big time for small businesses. Even Amazon includes frugality as one of its 14 leadership principles.
Here are 25 ways — some with big savings and others with small savings — you can use to increase your bottom line this year. (Obviously, not everyone will be applicable to your business.)
- Work from home and forgo the cost of an office. If you need to meet clients and customers, use a virtual office or a Starbucks (or Starbucks-like) venue.
- Make business decisions faster; delaying can cost you money.
- Buy used office furniture. Many large companies (and those of any size that go out of business) may sell unwanted furniture, including file cabinets, for a song. Companies such as Nationwide Office Liquidators can help you find what you need. You can also buy used equipment, such as refurbished computers and electronics, at a fraction of the cost for new items.
- Share equipment with similar businesses. This works, for example, for contractors who may not need the same heavy equipment at the same time as their competitors.
- Crowdfund for needed capital; this is essentially free money for your company (there’s no repayment of crowdfunded contributions).
- Turn off the lights when not in use. If necessary, install devices to make sure lights and other equipment are shut off after hours.
- Recycle office paper. Sheets discarded near the copier or at employees’ desks can be used for other purposes (e.g., shred discarded paper for packing material).
- Ask for discounts for lodging, car rentals, and other costs. Discounts may be available for owners who are members in certain trade associations, or in AARP and AAA.
- Use free or low-cost software and web tools, such as WordPress, Google Docs, and Doodle. Download.com gives you access to certain free software, such as anti-virus and anti-malware programs.
- Take customers to breakfast or lunch (or just coffee) rather than out to a more expensive dinner.
- Get an energy audit from your utility company to learn about ways to save. This may include changing your lighting (17% of electricity usage is attributable to lighting). Check energy-saving tips from the SBA.
- Use contractors instead of employees when appropriate. Instead of a bloated payroll, you’ll get the help you need when you need it, without carrying the costs year round. But watch IRS scrutiny on worker classification; you can’t label someone an independent contractor if he or she is an employee. You can also hire temporary workers if you only need work done for only a limited period or set project.
- Print on both sides to cut paper costs in half. Even better, think before printing. For example, save articles you want to read to a special file rather than printing them out.
- Market through social media. While there’s still a cost to tweeting and posting, it’s less than traditional marketing venues such as paid advertising.
- Reuse shipping materials (e.g., boxes, peanuts, bubble wrap). And reduce shipping costs by minding FedEx’s dimensional-weight pricing that began on January 1, 2015.
- Use rewards on your business credit card to buy things you need for your business. Compare credit card options at LowCards.com.
- Get free business counseling from SCORE in person or via email.
- Become your own banker. Instead of turning to commercial loans when you need capital, retain your company’s earnings so you spend your own money on future needs and avoid interest charges.
- Fly economy rather than business class. A few hours of discomfort can save a lot of money for companies that pay for frequent trips. And join a frequent flyer program that supports flights to your usual destinations.
- Review your existing insurance policies with a knowledgeable expert to cut unneeded coverage or find other ways to trim your premiums (e.g., increase the policy’s deductible).
- Spend on maintenance to save on repairs or replacements. If you routinely maintain your equipment, including vehicles, it won’t break down. Doing this can prevent costly business disruptions and avoid the need for expensive repairs or replacements.
- Save on postage by emailing instead (e.g., email invoices instead of mailing them). Where original documents are needed, scanning is often an acceptable alternative.
- Read your bank statement carefully so you can avoid unnecessary fees, even on low cost checking accounts. You may need to maintain a set balance or use direct deposits to escape some fees. Or you may want to switch to a bank offering checking that is really free.
- Ask for referrals to generate new business. This saves you time and money that you’d otherwise have to devote to finding new customers or clients.
- Barter for the goods and services you need. You won’t avoid taxes, but you will save money. Consider joining a barter exchange. Check with the National Association of Trade Exchanges to find the right exchange for you.
Bonus: Stay up to date for free by reading Idea of the Day[R] and Big Ideas for Small Business[R]. I’m sure my information will help you save money!
Conclusion
While the ways to save money are limited only by your imagination, there are some things you shouldn’t stint on. Hire the best employees you can and pay them well. Get good professional advice, which can be pricey but likely will save you money in the long run.
