How Small Business Owners Can Spend Less Without Slowing Down

Poor cash flow is one of the major reasons small businesses fail, and it makes sense that you don’t want to be wasting one single dollar. But chances are, over time, you’ll be wasting money without even realizing it.  There are a lot of expenses that come with running a small business, and there’s often a fine line between thriving and driving in a given month.

These points are going to give you some areas to look into to help you assess your outgoings and make sure you’re not unnecessarily wasting your revenue.

Cut Software and Subscriptions

One of the most common ways for small businesses to be wasting money is by paying for software or subscriptions they’re not actively using or are duplicates they are using in another one.

Then, when you factor in things like free trials expiring and you’re now paying for the ongoing subscription, if you’re paying for a license for an employee who no longer works in the company, it’s not hard to see where your money is going.

The right approach here is to go through everything you’re paying for and ask simple questions. Is it being used? If not, cut it; if so, ask if it’s earning its keep.

Once you know the answers to these questions, you can cut anything that isn’t earning its keep, and it’s wasting your money.

Then for the tools you do keep, check you’re on the right plan for them. Many platforms change significantly over time, and if you’re not on top of what you’re paying for or what other packages they offer, you might be paying for something that isn’t suitable for you. It might be a case of upgrading or downgrading, but it can still be looked into further to ensure you get value for money.

Something else to consider here is whether or not any of your tools overlap. If they do, can you cut one and use other features from a different software for anything you might lose? It doesn’t always work out, and what you lose might be worth more than the money you save, but it’s something to consider at this point.

Move to Cloud-Based Tools

On-site hardware is expensive to buy, expensive to maintain, and expensive to replace when it fails. These are things like your servers, on-premises phone systems, local storage devices, etc. All of these come with upfront costs, ongoing maintenance requirements, and an inevitable end of life that just restarts the cycle all over again.

Moving to cloud-based tools, however, removes most of this overhead. Instead of paying to own and maintain that infrastructure, you simply pay a more manageable monthly fee for access to software and storage that is maintained for you, updated and secured by the provider.

Another benefit of cloud-based tools is that your team can work flexibly as they can access what they need from wherever they are and whatever device they’re using. They don’t need to be in a physical location or connected to a certain device to work.

Swap to a VoIP Phone System

When you have a traditional phone system, you’re just increasing your outgoings unnecessarily. You’re paying for line rental, hardware costs, maintenance contracts, and per-minute call charges on top of this.

Instead, you can switch to a VoIP phone system, which moves your business calls over the internet rather than via traditional phone lines, which cuts costs considerably. You don’t have to pay for expensive on-site hardware to maintain calls, which are substantially cheaper, and the monthly costs are more predictable and scalable.

Beyond the cost savings, however, a VoIP phone system has features that traditional landlines just cannot. You can take calls on a laptop or a desk phone using the same number. You can use call routing, voicemail, and email, and have everything built in as standard. And if you need to maintain a level of professionalism as a small business, then this is definitely going to be beneficial.

Outsource

Having full-time staff is expensive, and it’s one of the biggest costs for small businesses. But what can you do?

For tasks that do not require a full-time presence, you can outsource to companies that offer the services you need for a more cost-effective solution compared to salary benefits, payroll taxes, and onboarding time. Outsourcing is considerably more cost-effective. 

What you get is a team that is skilled in the area the outsourcing company practices in, meaning you get the level of experience and qualifications you need without having to pay the salary usually required for this in-house. 

What can you outsource? There are plenty of options for you to outsource, including bookkeeping, IT support, administrative tasks, marketing, social media management, and so much more. It’s a case of understanding what would benefit your business and finding providers who can help you get what you need.

Review Supplier Contracts

This can often fall behind some of the other points here, as you don’t want to upset your suppliers by questioning their prices or your relationship. But if you’re not, you’re doing yourself a disservice.

When you sign contracts initially, it might be that at your current point, the terms don’t always suit your business. And if no one is reviewing the initial contract terms, then it’s highly likely you’re not getting the maximum benefit from the relationship.

Make it a habit to review every single contract at least once per year. Look at what you are paying for what you are getting and whether the market has moved since you last checked.

If nothing has changed, great, but it might give you options for negotiations once you’re out of contract to get better terms. If you have been in a good relationship with many clients or suppliers for a while, they’ll see the benefit of your relationship and work with you to negotiate terms that work for everyone.

This list isn’t exhaustive, but it gives you a good base to work from so you can assess your finances and get things under control, so you can save yourself some money.