Every small business owner is conscious of their bottom line. For every win your business experiences there can be an equal loss that can come in the form of unexpected bills, expenses or urgent purchases. Some days you may have more customers than you can handle and other days you may be wondering if you’ll even be able to cover payroll.
We can’t tell you how to manage your business, but we can let you in on a few of our favorite business hacks to optimise your savings. For example, reviewing your Public Liability insurance can save you loads of money. Visit bizcover.com.au to find out more.
For more tips on cutting business expenses, check out the list below.
1. Know Your Industry’s Benchmarks
The first thing to figure out is if your business expenses are typical. There are many government offices who share figures and facts about different industries. The Australian Tax Office (ATO) and Australian Bureau of Statistics are great places to start. Their websites are full of information and are straightforward to navigate. The ATO even has a free mobile app you can download onto your smartphone. The ATO app has a tool that checks your business performance in comparison to similar businesses. It’ll show you how competitively your company is performing.
2. Use Social Media Advertising
Social media advertising is an increasingly effective and popular way to reach customers. Using Facebook, Instagram, Twitter, and other online advertisements is estimated to cost 65% less than traditional TV ads. Using online advertising also allows you to market to a more personalised level. Skip billboards, TV, radio, and print ads in favour of reaching out to the right people online. Lowering your marketing budget is one of the quickest ways to increase your profit. When done correctly, online advertising will offer much greater ROI (return on investment) than traditional advertising methods.
3. Buy Used, Save AUD
Setting up an office space or store front location is always pricy. Before you write a cheque for brand new furniture and equipment, consider buying ex-showroom stock, visiting sample sales or purchasing refurbished electronics. Private sellers and websites such as eBay, Amazon, Gumtree or even Facebook marketplace can have some great finds and offer serious savings on brand new or lightly used products. Someone else’s spare desk, too-big filing cabinet, or second-hand printer will work just fine for your company and you won’t pay full price.
4. Track Your Business Expenses Closely
You don’t need to spend heaps on an accountant for all your financial needs. Today there are plenty of accounting, invoicing, and inventory applications that you can use to regularly record and review your business expenses. The quicker you can see the bigger picture, the quicker you can make smart financial choices for your business.
5. Utilities Could Be Slowly Draining Your Bank Account
You certainly can’t cut out internet, gas, power, and electricity from your budget. However, you should track how much you’re spending on these utilities. You may be surprised that seemingly simple changes in your usage can positively impact your bottom line. For example, you may want to get a programmable thermostat to minimise your heating bill. Maybe it’s time bite the bullet and pay a plumber to fix a water leak which is draining your bank account drip by drip. The ATO also offers a free online comparison tool so you know if you’re getting the best rate for electricity and internet possible.
6. Negotiate Better Deals
You’re making a big mistake if you immediately agree to the first price that a vendor offers you. It never hurts to ask for a lower price. Go into a vendor meeting with a goal in mind, knowing what you’d like to pay. You may not get a ‘yes’ every time but if you do then your business will benefit. Don’t be afraid to negotiate better deals with all your suppliers. If you’ve been a loyal client, then your vendors will most likely give you some type of discount. As a small business owner, you understand better than anyone how important it is to retain loyal, repeat customers
7. Lower Costs for Your Business Location
It may be time to evaluate just how much your business location is costing you. There may also be lots of wriggle room to save money. Maybe you can negotiate with your landlord for a better lease, especially if you’ve been a long term tenant. If your property prices in your suburb have gone up, consider moving to an up-and-coming area that may be cheaper. A third option is to operate your business from your home which would save you monthly rent and other fees. But before you start running your business from the kitchen table, be sure to research neighborhood zoning and other bylaws so you remain compliant with local regulations.
Getting to the Bottom Line
Many small business owners will tell you that running their own company is full of ups and downs. Some years are lean and others are plentiful. Its impossible to accurately predict if tough times are right around the corner, no matter how up-to-date you are on latest financial and industry news. It makes sense to plan ahead during ‘good’ years and make as many savings as you can. Using a few of our business hacks could save enough cash today to keep your business moving along tomorrow.