Save Your Business Money

Employing a few simple practices can often make the difference of several thousands of dollars per year. Are you spending more money than you need to?

As is the case with most kids, my mother’s advice usually went in one ear and out the other. I can’t tell you how many times I got stitches or burned myself because I didn’t listen to my mom. Now that I’m older, I sometimes think that I still haven’t learned enough from her advice, but there’s one skill that my mother taught me that has remained with me: the ability to save money. Over the years, I’ve learned that her simple tips weren’t just useful for me as a child; they’ve proved invaluable in the business world as well.

I learned these tips early. For as long as I can remember, my mother has made elaborate gift baskets and sold them to my stepfather’s company. In turn, his company would send them to their clients as holiday business gifts and a token of thanks for their loyalty. Every holiday season, my family and I took orders from my mother and turned out hundreds of gift baskets in a matter of weeks. All of the items in the gift baskets were expensive, but she would buy them right before the holidays because that’s when they were the cheapest. Looking back on those days, I can see that since my mother’s business was primarily seasonal, she stretched her dollars as far as possible. She also kept her profit margins from thinning on absolutely everything that she could without cheapening the baskets. My mom helped me understand that every dollar she saved was making another dollar for her very small business.

Entrepreneurs like Eric Swanson, the owner of Chicago’s Eric Swanson Bowmaker, have found a number of ways to maximize their profits by minimizing costs. Swanson makes and repairs bows for musical instruments such as violins and cellos. Because the vast majority of his work is done at one or two tables, he has no need for a large workplace. “I share my space here with other business owners in the music industry,” Swanson says from his office high above State Street. Even better, since the other small business owners come from non-competing professions (such as instrument sales or musical instruction), Swanson occasionally gains business from his fellow renters. For instance, if one of the renters sells a cello, Swanson can sell a bow to the buyer. Swanson advises that if a business has an extra room or is only using half its available space, the owner should consider renting out that space to save money on rent. “I also use the business phone only for incoming calls and my cell phone for outgoing,” Swanson says.

Swanson’s examples demonstrate that some of the best methods of saving money don’t necessarily take up much of your time. Many of them begin with a simple tip, much like the ones my mother used to give me when I was wrapping gifts in the beautiful baskets.

Advertising


Changing your advertising practices is one of the quickest ways to start saving money. Make the most of your point-of-purchase opportunities by handing out business cards, coupons, and customer loyalty rewards, or by distributing a newsletter about your business to your customers. Another way to reduce your expenses is to partner up with some of the other businesses in your area and split advertising costs by jointly promoting sidewalk sales and offering group savings from each other’s businesses. Take advantage of your marketing alliances by sharing mailing lists, distributors, and suppliers. Referral discounts are also an excellent way to bring in more customers. If you have happy customers, post stories of their satisfaction with your products or services on your website. In addition, put your website address on your company letterhead, invoices, business cards, and e-mail signatures. Include it on your employees’ uniforms, all promotional items you send out, press releases, and on anything else where potential clients will be able to see it.

If you have happy customers, post stories of their satisfaction with your products or services on your website.


Cut Energy Bills


One of the most important skills a business owner must learn is how to lower the bills. To save on lighting, use compact fluorescent and halogen bulbs. They use less energy, produce more light, and last longer than ordinary incandescent bulbs. There are also many other energy-saving gadgets available such as auto-setback thermostats and automatic light switches. Using motion detectors to activate heat and lights in spots like storage rooms and other infrequently visited areas is a great idea as well.

Adopting a few simple habits will go a long way toward lowering your energy bills. You can do many of them while simply walking around your business. During the day, you should frequently check to see if lights are unnecessarily left on throughout your store. Since winter is here, the lights should be on in the morning when it’s dark outside and turned off when the sun is streaming in. Not only is natural light very inviting, it’s also free. Most—if not all—of your unused work equipment should be turned off when not in use (e.g., photocopiers, air compressors, pumps, DVD players, TVs, projectors, and computers). Any of these items can consume a ton of electricity each month if left in standby mode.

If you’re in an older building and still use propane or heating oil, compare prices from the available suppliers. Find out if your business qualifies for discounted rates. If you can get a business rate, make sure that it’s actually cheaper than your residential rate. Ask your neighbors how much they pay on their heating bills. Many state utility commissions favor homeowners but many also offer business discounts. When replacing equipment, look for office equipment that displays the Energy Star logo. Using such equipment can cut your electrical usage by as much as 50 percent over other equipment. Learn more about the EPA’s Energy Star program from their website at energystar.gov.

Business Overhead


As a member of America’s Best Companies, you can reduce your business’s overhead expenses by taking advantage of our discounts, which are designed to save you money and time. With your discount from Staples, for instance, you could purchase card stock and create inexpensive business cards by printing them yourself right from your computer. Be sure to buy the ones that have clean edges since the cards with perforated edges tend to look homemade and unprofessional. Using UPS will save you up to 25 percent on your shipping costs. Using Lenovo will save you up to 35 percent on a business computer. Check your mailing list often to make sure that you have correct addresses. Also, by adding ZIP+4 numbers in your mailings, you may be eligible for bar-code discounts.

There are dozens of other discounts available with your membership to America’s Best Companies. If you only find five affiliates that you can save 20 dollars with, that’s a hundred dollars saved and a hundred dollars made.

My mother continues to make her baskets, and she attributes her longevity to her simple but effective savings approach. Indeed, for most businesses, learning how to save money is an essential starting point for growth. After all, every business exists to earn a profit. To earn a profit, you can either increase revenues or cut costs. Of the two, trimming your costs is usually easier.

Which reminds me: As I learned from years of working with my mother, the best staff members usually come from your own family. If you have children, allow them to participate in the family business, especially if they’re over 14 and able to work. They’ll come away not only learning how to manage a business and their money, but also gaining respect for your business and a wealth of experience for their future.

Quick Money Saving Tips for Your Small Business



Start a Cheap Online Store
It’s not necessary to rebuild your website (or even make one) to start selling your products online. Use inexpensive auction sites such as eBay and Yahoo Auctions to bring your products to the world.

Market Yourself Online
This doesn’t mean paid advertising. Start participating in online discussion forums related to your industry. Users will gain interest in your products and your ideas. Similarly, start commenting on blogs related to your industry. You’ll get your name out to a wider audience, and, if your URL is attached to the comment you left on the post, you’ll make your website more visible as well. See page our tenth resolution, Market Your Business on the Web, for more information.

Send Your Mail Early
By sending out your mail early in the morning, you can often have it delivered in one or two days while only paying for a first-class stamp.

Hire College Students
College students looking for experience for their future career are often willing to work for free or for little money.

Hire Temporary Employees
Expand your workforce during peak seasons by hiring temporary employees. This way, you won’t have employees during the off seasons who don’t have much to do.

Get the Word Out
Write for your local paper or offer classes related to your industry. You’ll gain a reputation as an authority in your field along with inexpensive publicity.

Purchase Used Equipment
It’s not uncommon for a business to save almost 75 percent on equipment purchases by buying used products. Even relatively new equipment can often be found on eBay for much less than it can be found elsewhere.

Reduce Legal Expenses
If you have things to discuss with your lawyers, make sure you plan what you want to talk about in advance as this could save you hundreds of dollars in hourly legal fees. Similarly, take the time to listen to and act on every complaint. Not only will you gain satisfied customers, but you’ll also keep yourself out of the courtroom.

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Reader Comments


Tuesday, December 16, 2008 at 12:02 PM
Kim says:
Sometimes we never want to listen to our mothers. It's often the best advice we'll ever hear.
Thursday, July 17, 2008 at 4:14 PM
Gloria Gordon says:
Of the ways to increase your business, I personally feel as though saving money is first and also the best way. I believe Benny Franklin said it best "A penny saved is a penny earned" If as a business owner i can save $500, then i can use that extra $500 in advertising or some other avenue. I really appreciated this article.
Thursday, January 31, 2008 at 11:38 AM
Regina from Wisc. says:
Saving money while running your business to me has always been the most important aspect of having a small business next to the actual operations. In the past i have always keep records of how much money i have saved throughout the year and used that money in other parts of my business such as advertising budget or other aspects of my business that can use the extra money.
Monday, January 28, 2008 at 9:00 AM
anonymous says:
i disagree, honestly i always found hiring experienced or temp agancecys much eaiser than college students. the college kids are lazy most of the time and just showup to work to make a few more beer money.
Monday, January 21, 2008 at 8:27 PM
PeterN says:
I was able to bear the expenses of launching my business thanks to hiring college interns that worked diligently and most importantly inexpensively. A few other good recommendations in this article as well. I have also been able to take advantage of quite a few small business discounts available through the Partner section of this site.
Monday, January 21, 2008 at 3:19 PM
Kenneth Edelstein says:
I have never heard of this company until my sister in New Hampshire forwarded this article to me. I really enjoyed this article in particular because even if you didn't own a business some of these money saving ideas can be used in your home.
Tuesday, January 15, 2008 at 4:32 PM
Jeff H. says:
I have actually used a few of these tips before for my business, but now im going to try and implement some of these tips into my business. Thanks a lot.

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