According to the Ewing Marion Kauffman Foundation, a small business needs about $30,000 in funding to get off the ground. As the business grows and expands, operating costs will grow right along with it.
However, there are ways you can significantly reduce your expenses and save money. By being flexible, keeping an open mind, and considering innovative solutions, you can cut your business costs and boost your revenue. Here are seven tips to get you started:
1. Use a Credit Card to Save on Advertising
Utilizing social media can be a cost-effective way to target niche audiences and advertise your business. You can start a campaign with as little as $50 on Facebook or Twitter.
Make the most of your ad campaign by paying for it with a business rewards credit card that offers cash back or points to offset the cost of advertising. You can use those rewards to pay for other necessary business expenses or to extend your advertising campaign, stretching your budget further.
2. Use Technology to Save Money on Office Supplies
If you frequently shop online for office supplies, make sure you use a cash-back app like Rakuten. These apps offer cash back on every purchase you make with participating retailers. For example, as of October 2019, you can earn 2 percent back at Staples using Rakuten. If you spend $5,000 per year on supplies, you’d earn $100 in free rewards.
You can also save money by setting up Amazon subscriptions for frequently purchased items, such as cleaning supplies or printer ink. When you subscribe to automatic deliveries, you can save up to 15 percent.
Quick note: If you’re ordering both personal and business items online, be sure to keep your expenses separate, and don’t use a business credit card for personal transactions.
3. Go Remote
With today’s technology, you may not need an office and all the expenses that go along with it to run a successful company. Instead, you and your team can do all your business remotely. The savings could be significant, as you won’t have to worry about overhead costs like renting and furnishing an office. Plus, when your employees can work from anywhere, you can recruit top talent from anywhere, radically broadening your talent pool.
A report from Global Workplace Analytics found that businesses could save an average of $11,000 per employee if they allowed employees to telecommute just half the time. The savings could be even greater with a fully remote team.
4. Hire Freelancers and Independent Contractors
Your growing business needs help to keep growing, but hiring full-time employees is expensive. In addition to their salaries, you’ll have to pay for benefits like health insurance and workers’ compensation. According to the JP Griffin Group, employers spend an average of $11.38 per hour per employee on benefits in addition to the employee’s hourly wages. If your business has slow periods, you’ll be paying workers that amount even when your company isn’t bringing in money.
Consider hiring freelancers, independent contractors, and temporary workers until your business stabilizes and you can prove a need for full-time employees. You’ll pay a flat or hourly rate for these workers’ services as needed without having to worry about benefits.
For more expert entrepreneurship insights, check out the latest issue of Recruiter.com Magazine:
5. Apply for a Travel Rewards Card
If you have to travel often for business to meet clients or attend conferences, it’s a good idea to apply for a travel rewards card. Not only will you earn valuable rewards in the form of points or miles, but you could also qualify for significant savings or rewards points on specific categories of business and travel expenses, such as software subscriptions, internet service, shipping costs, travel accident insurance, and baggage insurance.
6. Buy Secondhand Equipment
If you need printers, copiers, computers, desks, cubicles, or chairs, you may not need to buy them new. You can often find secondhand office equipment in excellent condition for a fraction of the cost on Craigslist or through national sites like Cubicles and even Amazon.
7. Adopt Cloud-Based Business Software
In the old days, you had to buy separate software copies and licenses for each computer in your company. Some of these programs could cost hundreds or even thousands of dollars up front, making the price tag prohibitive for small businesses.
Now, however, companies can use cloud-based platforms and pay monthly subscription fees instead of buying software outright. For example, G Suite’s Google Docs, Sheets, and Slides are excellent replacements for Microsoft Word, Excel, and PowerPoint — and pricing for basic business G Suite access starts at $6 per user per month.
Running a business can be costly, but by looking for ways to economize and even eliminate certain expenses, you can keep costs down while pushing revenue up. It just takes some careful planning and some smart shopping.
Kat Tretina is a freelance personal finance writer based in Orlando.