Increasing profitability of your company is a completely sane and normal thing to think about. And often, solutions are rather simple and very easy, so that you can decrease the amount of money you are spending.

A large number of small businesses, around 80%, fail in the first 18 months. Many of them focus on earning money, instead of carefully controlling their expenses and that’s what leads to their fast failure.

Consult With Employees

You may have some ideas that will cut your expenses (especially in area of payment and bonuses to workers), but it is possible that you don’t have all the answers, even being the boss. Asking employees for input can be very beneficial and very simple way of cutting your costs. Once you hear their ideas, and even apply some of them, they will tend to better understand the limits your budget is facing with and be more understanding about not getting a raise or a bonus. Team work should always be one of the top priorities of a healthy small business company.

Advertising

Starting a small business costs a lot of money, but there are areas you can save ton of money on. Paying for a billboard or TV commercial can cost large amounts of money and you can never actually measure the effects. Social media marketing can be a lot cheaper and the effects are easily visible. You can even start marketing and limit yourself to only $100 per month.

Jump on the Internet bandwagon and enjoy the ride. Check out also our own GLMall where you can advertise your small business for a really low cost.

Switch Banks

Banks are always praying you and they can make a long list of expenses for your company, therefore spending your hard earned money. You are not a convict! You don’t have to be tied for one bank forever. If the competition is offering better conditions, switch the bank. It may cost some money to leave the bank you are in now (to close the tab), but in the long run you will save a lot more if the other one is not charging every single transaction like, ATM surcharge, bounced check fees etc.

Employee Spending

Team work is a top priority, but there can always be members of the team who are not honest team players. They can abuse the trust you have in them and spend a lot more than they should. Making limits in advance, planning and staying informed is a very important aspect of cutting costs for a small business. Give a closer look to the monthly reports you are getting and things should be fine.

Negotiate

Always negotiate. Save money on every front you can. If you are frequently working with one supplier, ask them for a discount on the next shipment. Getting a onetime 50% discount can be a huge deal for your business. If you are getting monthly discounts, try to increase them every couple of months. Ask for benefits in paying early or cash. Always negotiate.

Use More Technology

Not having to print everything saves money on office materials. Communicate via emails sending various documents as attachments. Hold Skype or other kind of conferences, as it will save you a lot of time and money. You can do something a lot better than riding an airplane or driving a car for hours.

Budget

Last place on our list may be the most important. Not having a definite budget can be a serious problem for any business, especially small one. Perhaps you are not able to plan a full year in advance, but at least you should have a monthly budget plan. It is impossible to make smart financial choices without a clear plan. Even if you have some urgent expenses, those should be a part of your plan under a ‘emergency exposes’.

How To Start a Business Budget