A small to medium business is not easy to manage by any means. But when it comes to expanding your profit margins, there are a few options. Saving capital on your day-to-day expenses is by far the easiest change to implement that can accomplish this.
But how do you save money? There are so many advice forums, SMB groups on social media, and articles saying different things. So, what can work for you, and where should you start?
In this article, we will cover some of the more generic, common ways you can save money on your day-to-day. But we will also offer up some less common methods you can employ if your situation and business model allows it.
So, here are some cost-cutting tips to help you save!
Re-Evaluate Your Water Supplier
This is a tip that can potentially save a huge portion on your monthly bills, depending on the sector that you are trading within. But what should you re-evaluate?
When it comes to a water supplier, there are a few ways you can evaluate their service and if switching your water supplier is something that can benefit you.
The first big red flag you should look for is if your actual water usage doesn’t match up with the bill you are paying every month. If you end up paying more than what you should be, you should request a breakdown of your monthly cost and assess from there.
There are quite a few reasons why you could be paying more, but a good water company will appropriately investigate this for you.
You should also assess how often your water bill increases, how many accessible benefits you have as a customer, and if their customer service is up to par.
But this moves us onto;
Cut Down Your Water Consumption
If you are happy with your water supplier, that is wonderful. But there are still various ways in which you can save on your water bill itself by slashing your water consumption where possible.
If you operate your business within the hospitality industry, investing in more efficient dishwashing machines, adding faucet aerators to your taps, and implementing a water-saving policy into your company culture are good places to start.
If you don’t work in hospitality, you still have some options such as the aerator add-ons for your kitchen and bathroom taps and adding a toilet tank to all your staff toilets; to save water with every flush.
And as a happy side note, saving water also helps to save the environment. A win-win!
Saving Money On Office Supplies
If you are running an SMB that works from an office, you could be saving on aspects of your everyday business that you may not have considered yet.
For example, if you are a business that makes use of a lot of paper copies of documents, you can save money by buying recycled supplies such as printer cartridges or the paper itself.
And, like saving water, this tip can also help you save the environment, which can have a positive public relations impact.
Invest In Used Or Refurbished Equipment
When the time comes to replace a machine or piece of equipment, instead of buying the top-of-the-range model that will set your cash flow back for months, go for a refurbished model.
Computers are a good example of refurbished equipment that can work just as well as a brand-new model, with a few minor or marginal differences in operating efficiency.
For SMBs that just need a computer for administration tasks or for businesses such as law firms, this can be an ideal solution to save.
But this can also be applied to different sectors. Why buy a brand-new commercial kitchen counter when you can get a used one?
So, next time you need to get a new bit of kit or equipment, have a think about if a used or refurbished unit could be of use.
Save By Changing Your Business Money Mindset
A big aspect that can be overlooked when it comes to saving capital as an SMB is your mindset. A lot of small business owners will look for quick tips and aspects they can change about the business itself when saving money.
The tips on this list so far are good examples of this. They are great for making immediate changes that can save you money over the next few months.
But changing the way you think about money, expenses, and operating your business is vital to saving capital in the long run. Getting into good habits for spending and saving money while trading is what will get you the biggest gains overall.
So, what exactly does saving by changing your mindset look like? Well, to begin it could be;
Overestimate Your Business Expenses
This is a brilliant way to ensure that what you do need to spend never catches you off guard.
If you overestimate how much you will be spending on your day-to-day, it will leave you with a buffer that can either pick up the slack if you go over your estimate or leave you with savings.
This is a great way to ensure you remain on budget.
Change How You Think About Business Loans
A lot of business owners, especially new owners, are reluctant to take on a loan. But there is an abundance of situations where loans are a necessary part of doing business.
For example, taking on a sensible loan can open up a door for growth if you are on the cusp of a growth curve. Sometimes all you need is the extra capital behind you as a catalyst for that growth.
Saving capital as an SMB owner can hinge on many different factors, and this article is by no means an exhaustive resource. But it does serve as a good starting point to begin your saving journey.
As a last word of advice, always be sure to look at both your ROI as well as your expenses when making new investments.