September 20, 2014

5 Steps to Help Your Small Business Save Money in 2011

It’s the New Year! Time to make all those resolutions about losing weight and walking the dog… but how about taking some quick steps early in January that might save your business money throughout the entire year?

5 Steps to Help Your Small Business Save Money

Here are five steps my management team is taking to save us money in 2011:

1. Set the tone.

Your team will take their cues from you, so meet early with them and remind them of the importance of being frugal this year. Getting everyone focused on intelligent thriftiness at the beginning of the year can pay dividends as the year progresses. Remind the team of simple actions they can take to save money, like asking for discounts when purchasing goods and services for the business.

There is nothing wrong with asking; and if you don’t ask you can’t save!

Let them know they should turn off their computers when they leave the office at night to save money on electricity. Then solicit ideas on areas where the company can economize. It’s all about setting the tone and getting your employees bought in.

2. Check subscriptions and recurring charges.

The beginning of a new year is a great time to review your monthly expenses. Small, recurring charges can add up over the course of 12 months. Make sure you are still using all of the subscriptions that you see billed on your corporate card – everything from magazines to cloud services to trade group memberships. If you are not using the product, cancel! And if you are planning on using the service for the entire year try to get an annual plan. Companies often offer discounted annual memberships.

I realized that I had signed up for a couple of services on a monthly basis so I could “test” them – and I had forgotten to buy the annual plan when I started using them regularly! Pull out a couple of your last few credit card statements and looks for savings.

3. Plan for taxes.

It’s never too early to talk with your accountant about tax strategies for the new year. I know you’ll be spending way too much time with your accountant come April, but why not make April 2012 a little better by making sure you are taking all the right steps from the first month of January?

4. Create an expenditure plan.

As a competent business owner, you probably already know a large percentage of the big expenditures you’ll need to make in the coming year. And you likely also have a decent idea of when you’ll need to make these purchases. Put all this down in a spreadsheet, and estimate the dollar amount and the purchase date. Getting all the items on paper will help you visualize your big cash outflows for the year, and will help you prepare to make more intelligent purchasing decisions.

I find that if I know I’m going to need to make an important expenditure in June, I start looking for deals in March – and can often find discounts, sales or items on eBay. Also, if you know what you are going to need, you will be more thoughtful in how you react to coupons and special offers you get from your vendors.

Finally, remember that the account managers who serve you are likely working on quarterly commissions. If you can pull forward your purchase by a few weeks to the end of a quarter, you may be in a much better negotiation position. But you can’t do any of this unless you plan ahead!

5. Check out Anita’s e-book on small business money saving tips!

She lists 75 ways your business can save money and prepare for growth. You’ll find great ideas from saving money on stamps by using your bank’s check payment feature to taking advantage of your kids’ latent tech skills.

What steps are you taking this January to run a more economical business this year? Please share your thoughts below – let’s help each other have a great 2011!

15 Comments ▼

Prasad Thammineni


Prasad Thammineni Prasad Thammineni is a serial entrepreneur and CEO of OfficeDrop, a scanner software and document scanning service, cloud filing system, that helps small in paper intensive industries go paperless. OfficeDrop gives companies easy ways digitize paper, organize files and securely collaborate with business documents.

15 Reactions

  1. I would love to add a couple of items to your list as well as comment on point #1. When talking about being Frugal, I would rather present it in a different way. Rather than suggest cutting back or cutting costs, consider paying what you paid last year but leverage that purchase or leverage that technology.

    This past year, I moved away from my blackberry and purchased an HTC Smartphone. Not only did my costs go down a bit (or stay the same) my productivity and method of doing business changed dramatically and increased. So if all I accomplished in 2011 was to better leverage what I spent, that alone would be awesome.

    Other considerations for me in 2011 include:

    * Taking advanatge of Cloud Computing more…its paying the largest dividends financially. Its not just a buzzword.
    * Definitely partner with others or participate in a mentoring or mastermind group
    * Accept and work towards creating and promoting your “brand”..it can ony pay additional benefits. Participate in Social networking but don’t set any hard and fast expectations. See what it can do for you. Many of my clients still question it but see great results when it comes to hiring great staff.

    I think the points you presented above are great and many of us can overlook them. But its important that we treat our businesses as businesses and always plan ahead.

    In 2011, I personally see it as a year of change and innovation. But for the better!

    Cheers
    Gordon

  2. Thank you for making your first point about setting the example at the top. Nothing erodes initiatives quite like perceived hypocrisy. If you’re telling employees to tighten their belts while you take the board golfing every Friday, you’ll likely lose their buy-in. Practice what you preach and people tend to follow the leader.

  3. Step #2 is a very good because it’s something that not all of us think of. When you have dozens of subscriptions and recurring charges billed to you each month, it gets difficult to track them all and we often times forget to look over these charges to see if we really NEED them or if we are even using the product/service anymore.

  4. Hi,

    All the 4 steps which were suggested by you are really good. People who are doing Small business like us will really get useful tips to develop the business and do better services to our customers.

    Wish you a Happy New Year!

    Lakshmi

  5. I definitely agree with Gordon in relation to point 1. Being frugal is not the ideal way to approach the idea of saving money. Working as efficiently and effecitvely as possible in terms of costs and time spent is the something which should underpin all operations within the organisation.

    It is about making savings were you can and you should definitely continously review practices and payments being made, while at the same time investment may be needed in order for you to save money in the long term.

    Having the an appropriate business management solution in place will help your organisation see clearly, think clearly and act clearly. SAP Business One is a fantastic solution from the world’s leading provider of business software designed specifically for small businesses. It’s straightforward to implement, maintain and use and will save you both time and money in the long term.

    Saving money needs to be considered from a long term perspective in order for it to be of any real worth.

    http://www.beabetterbusiness.co.uk

  6. @Prasad Thammineni Thanks for the tips. I agree with tracking down those ‘Small, recurring charges’ they really ‘can add up over the course of 12 months’

    @Gordon, I have been consolidating services by moving to companies that offer more for the money. I agree, my goal is to increase productivity with current or less spending. My buzz word is efficiency vs frugality.

  7. Thanks for the information – there are some great tips I can use.

    Dont gorget to chase those monies due – due I suppose that is a different subject!

    John
    JMF Disco
    Wedding DJ and Mobile Disco

  8. Thank you for great information! I alway forget to cancel auto renew subscriptions! it really adds up over time!!!

  9. http://kevinaubreytoday.com

    I agree with Prasad and the steps outlined in this blog. I also commend Greg on his post and think this insight is crucial in moving your business forward during trying times. When looking at cutting costs and minimizing expenses you must also consider the effects on efficiency and productivity. Cut away if your business isn’t negatively impacted, otherwise look for ways to boost productivity and effectiveness while keeping costs level. The end result is often better then actually decreasing spending outright.

    Thanks again for the great topic.

  10. In order to re-invent and run my business more economically I realised that I needed to take a hard look at myself. This led to me preparing a personal five year plan. (Where there is a will there is a way.) With this behind me I was better able to re-evaluate evey aspect of my business. Now I have cleaned out the clutter, set the tone and have identified clear focus areas and goals for my personal life and my business. Thank you for your detailed process as to how to re-evaluate one’s business.

  11. I think that there’s truly some gems to what you say. For instance, I think that point number 4 is so useful, especially if you own more than one business… Paying close attention to your expenses can save serious cash (cancel them too, just like you mentioned in number two. Thanks for this thorough overview. Cheers!

  12. This is a great article! As a small business owner myself, I am always looking for great resources to help save money where I can.

    I wanted to pass along this fantastic resource that just came out in Canada. ContractTailor.com is a reliable online service that allows us to efficiently and cost effectively put together our own legal contracts.

    The initial contract is drawn up by an actual lawyer, we go in and with the help of a step-by-step wizard, cater the contract to our specific needs, and are finished at a fraction of the cost! There is even a free trial that you can test.

  13. I work for a really small company-only a handful of us, but one thing my boss does, is actually spend a bit fortnightly on a staff lunch or dinner. Yes this is an extra cost, but in doing so, we have really informal, relaxed meetings, whereby we all feel like part of the bigger picture being created, all feel like we have something of value to contribute and very easily maintain that sense of “what’s important and what we’re striving toward”. Seems like a minor, but their is such a sense of unity created, I feel it does wonders for productivity.
    Another thing he incorporated last year, was switching us all to prepaid wireless, something that has cut our cellphone costs right down, and freed up time that was being used to deal with bills, contracts and reimbursements. We moved over to Straight Talk’s unlimited option, and at $45, there are never overages, bad months, etc to deal with. Their coverage seems to be quite extensive too, as even when traveling, we can always still connect with each other. Has been a biggie in terms of monthly savings over 5 employees and really adds up annually.
    A really well written and helpful article, thanks.

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