Whether you are self-employed, running an SME or a large organization, there are a number of ways to save money. With cash flow often an issue for businesses of all sizes, we look at some of the most effective ways to save money on things such as:
Dollar Hand has put together a number of top tips including:
1. Flexible contracts for staff
Whilst it’s great to have a large workforce, you may find that some of your employees could work reduced hours during less busy periods. Providing that this strategy suits the staff members involved, then you may want to decrease their number of working days to for instance 3 days during quieter months and increase it again as and when necessary.
Since hiring internal employees can be expensive, another option to consider is outsourcing. Whilst some roles will need to be kept in-house, you could outsource tasks such as digital marketing, design, payroll and bookkeeping, getting expert-level help without having to pay for staff training. There may also be softwares that can achieve some of these tasks at a fraction of the price.
3. Lease restructuring
Restructuring your lease is a smart option to consider. For instance, you could look into whether you could be paying less for your office space if you signed up to a longer term deal.
4. Remote working
Remote working has become increasingly popular since Covid-19 times. This can be mutually beneficial for the employer and employees alike as alongside benefiting staff in terms of convenience, it means you don’t have to pay the physical costs of keeping employees in the office.
Alternatively if you wish to do a combination of work from home and the office, this could still work in your favor. You could save major office space by having half the workforce come in on some days and the other half on other days, allowing you to downsize the size of your workplace and save significant money on rent. You could also potentially consider sharing a workspace with another company or sub-letting your office to another tenant to help to reduce costs.
5. Increase energy efficiency
With average utility prices regularly increasing in the US, it is worth looking into ways to increase energy efficiency in your office. Utilities can often account for a large proportion of overhead costs so investing in smart technology such as a smart thermostat system may help you cut down on climate control costs without having to compromise on a reasonable room temperature.
6. Pay for staff on credit cards
Being savvy and paying staff salaries through credit can be a clever way to save money as a business – since credit cards allow you to get a loan paid off in installments. Research different credit cards as there are definitely deals to be had. For instance, signing up for an American Express Card means that every time you spend you can earn Avios points which can be used to pay for flights.
7. Use factoring to get all your invoices paid
Factoring companies can unlock funds tied up in unpaid invoices so that your business receives money upfront and cash advances, without having to wait for customers to pay. Whilst there is normally a fee for factoring which means you may not save money in the long run, it can certainly help to boost your business’s cash flow which can be helpful during slower revenue periods.
8. Use your machinery more effectively
Consider whether you could use your machinery more strategically. You could even look into hiring out your appliances in the evening or on the weekend when your staff may not be using them.
9. Negotiate to secure better deals
Negotiation is a key way to save money as a business. For instance, you may want to negotiate with vendors to secure a better deal. To do this successfully, it is worth doing research and getting lots of quotes from other vendors to work out what the best rate is. Whether it’s for stock, tech software, office rent or a cleaning agency, there are always deals to be made.
You could also try to secure more flexible repayment terms with your debtors. For instance, if you have taken out a business loan and wish to have a more favorable repayment plan.
10. Purchase items and stock in bulk
Purchasing office items and stock in bulk will often help to save you money in the long run. Whilst you will be laying out more cash to do so, you may be able to secure the products at a discounted rate and boost your overall profit, providing that you use or sell them as planned.