As a small business owner, you will always be looking for ways to save money to enable you to invest your capital wisely. This is a good mindset to have when running a business of any scale.
However, the past few years have been rough economically speaking, and so now it is more imperative than ever to look at how you can save money.
This article will highlight some of the best methods that small businesses can implement to save more capital monthly or quarterly. Let’s dive in!
Why Should Businesses Save Money?
This may seem like an obvious question, but not every business owner will save the money that is in surplus. Many SMB owners will choose to re-invest this capital into their business. This is a valid and effective way to run your business, but there is a case to be made for saving this capital versus investing it.
So, why should you consider saving? Multiple reasons:
A savings surplus can help you take growth risks without fear of going into the negative for ROI.
If you have a negative ROI, a cash surplus can help offset the difference and keep your business going.
A savings surplus can provide more security for your business in the long run.
Saving instead of immediately investing can give you time to effectively plan, manage, and spend this capital in the right areas.
Having some spare cash set aside can also help you plan for business emergencies also.
How Can Businesses Save Money?
When it comes to saving money for your business endeavours, you can employ many different methods and tips to save!
Save On Your Business Water
This is a big one that can often slip the minds of certain SMB owners, particularly if they don’t use water regularly. But no matter if you are running an office or a pub, you can always save when it comes to your water bill.
Initially, you may want to take notes about your water usage and compare them to how much your water supplier charges you. If there is a difference, even a slight one, then that is something that should be investigated.
Things like leaks or leaky taps can accrue extra capital on your end of month charges, and these can be easily fixed.
Regardless of your business, you can also install water-saving tap faucets and toilet tanks to ensure that your establishment uses less water for essential use.
Suppose you are in the hospitality or industrial sector. In that case, you may want to look at effluent charges and wastewater charges to see if you are getting a good deal. Comparing and shopping around for a better deal is always recommended as tariffs are consistently changing.
Castle Water is a brilliant company that can help you with all of this and even help you switch suppliers if that is your eventual decision.
As a last tip, ensure you have a modern, up-to-date water metre installed to ensure it is taking accurate readings.
Go Virtual, If Possible
If the COVID-19 pandemic has taught us anything of value when it comes to conducting business, it’s that working from home is more viable than previously thought. This new tilt towards working from home and hybrid working models can be beneficial to everyone involved.
If your business is one that doesn’t rely too heavily on an office or physical workplace, then it may be worth your while making the push to a fully digital working environment.
This can help you save on rent and utilities for your physical office that you no longer need but can also help you save on commuting, not just your employees.
Buy Your Stock In Bulk
Suppose you are a business that deals with physical stock, be it food, electrical goods, trade goods, or any kind of goods. In that case, looking into ordering in bulk may be a way to save.
While buying in bulk can cause a dip in cash flow initially, over time, this dip will be offset by not only the increased profit margins but by the frequency of buying in bulk itself. It is an excellent way to save for long term stockists.
Cut Down On Maintenance
For SMBs that need a physical place for trading, why not take a look at the maintenance expenses of running your business.
Do you really need a cleaner at the end of every day? Is that bi-weekly window washing arrangement really necessary?
It may be worth investing in the equipment and training your staff to handle these tasks instead.
Being able to save money as an SMB is a very important part of not only contingency planning but also for reinvestment and for kickstarting growth.
Be sure to save and re-invest, rather than choosing or favouring one over the other.