In times like these, business owners can benefit from finding small ways to save money. Changing just a few things about how you run your business can be the difference between good living and going under. Below are some of the most popular methods to lower the costs of running a business in 2016:
This applies to companies that practice extending credit to their customers. Try collecting a portion of the money in cash and up front. With that money you help increase cash flows, reduce your own credit risk in the eyes of investment banks, and save your small business money overall. Try asking for a down payment of perhaps 10-20 percent.
Consider a new bank
Each bank has unique ways of maximizing their revenue through regulatory methods that have substantially different impacts on customers. Relative to another bank, your business could be taking heavy tolls from obscure regulatory fees. If you have a tight budget, it is well worth your time to not only do all in your power to avoid these fees, but to shop around and see whether other banks are offering better policies.
Control employee spending
Many companies have reported big savings after cracking down on the misuse of company-issued funds. As a business owner, be aware that this wasteful behavior can occur throughout all levels of a business, so budget your own spending too.
Communicate with suppliers
Never forget that your suppliers need you just as much as you need them. So don’t be afraid to negotiate. Sometimes supply companies offer big savings for their business clients who buy in bulk. Find out by simply asking directly whether they would consider such a deal. If the bulk order deal isn’t an option, they may also consider extending an interest free loan.
Lease out sunk costs
Sunk costs are fixed costs, however there is a way to lower price tag if you play your cards carefully. Try leasing your equipment. This conserves working capital and provides liquidity needed to tend to other areas of business. Furthermore, by not buying the equipment you avoid things like repair costs that will almost always be provided by the company that issues the lease.
Rather than going to different companies for your internet service, fax and web server, consider finding a company that bundles all of them into one package. With a bundled package you may just save a few hundred dollars each year.