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Operating a small business can be expensive, making slow seasons and gaps in cash flow even more stressful to manage. Changes in the economy and consumer needs can hit quickly, so if you’re not prepared, you could find yourself in a completely different financial situation in a matter of months or even weeks. If you want to find ways to stabilize your finances, here’s how to cut down on spending for your small business.
Evaluate Your Prices
Look to new business trends to see what your competitors are charging for the same services. Are you going above and beyond, and short-changing yourself in the process? It’s important to stand out amongst the competition, but offering extra services or free add-ons can eat into your profits without you even noticing at first. See where you can restructure your products or services, and raise prices to meet market rates if necessary.
Negotiate Your Expenses
Make a list of all of your business expenses and then make a point to speak to the providers. They want to keep your business! Research all of your options for things like utilities, and don’t be afraid to shop around for the best prices. Take these numbers to your current providers and ask them to meet or beat the other offers. Make sure you let them know how many years you’ve been paying for their services and that you’d like to keep using them. In many cases, they’ll lower the rates to keep you around. Make a note of when you do this, since you may need to renegotiate after a year.
Go Paperless
Save yourself the cash and headaches by going paperless. No more paying for toner, ink, or repair costs for expensive printers and copy machines. Save room by getting rid of file cabinets, and feel better about securing important data with cloud services instead. You’ll also save time by knowing how to navigate your filing system and finding the information you need in record time. You can add this to your efforts to become a more sustainable company, which is important to many customers.
Find New Suppliers
If you can’t get good prices for your materials, it may be time to seek out a new supplier. You can use a lot of the same tactics you use when negotiating for utilities. Speak to other suppliers, find out prices, and bring those to your supplier. If you’ve treated each other well and fostered a good working relationship, they may be more understanding of your needs. If they can’t meet you on price, they may be able to suggest someone else. It’s not a bad idea to have several different suppliers you have a good relationship with, since you never know when one will get new product, faster shipping, or a rare deal.
Cut the Fat
If you need to cut costs just to stay afloat, it’s time to refocus on the core of your business and the things that are actually bringing in money. Track your activities, expenses, and profits to find the value of an hour of your time. As you go through your day, ask yourself if your current activity is actually worth the dollar amount you calculated. Is there a way to streamline those annoying tasks that are necessary but unpleasant when you could be doing something that gets you a bigger return? Why spend time designing a new line of products when your last launch went poorly and you have a consistent seller you’re not focusing on? If it’s bringing in money, that’s where you should focus your efforts and marketing skills.
It can be scary to think about cutting back on spending when so much of the entrepreneurial culture is about investing in growth, but sometimes sacrifices are necessary to keep pushing on. These skills you’re developing aren’t a sign of failure, but of resourcefulness, and that will help you throughout the life of your business.
