Every expense you incur as a small business owner will reduce your profits, so taking steps to reduce unnecessary expenditure will help you increase your overall profitability. Having said that, cutting corners can be a false economy, because there are aspects of your business which need sufficient investment to ensure your business grows. For example, changing to a cheaper supplier is a sound choice if you will be getting the same or better-quality goods with no loss of service or speed of delivery. However, it could be disastrous if the new products aren’t as well made, or you encounter problems getting stock on time. The smart approach to saving money is to reduce costs where they won’t affect your offering, and invest appropriately in the areas that will most benefit the business as a whole.
In days gone by, you would have had to employ a bookkeeper to keep your paperwork in order, and a CPA to help you with your tax returns. However, there is a range of very efficient accountancy software available now that takes all the hard work out of keeping your financial records. These systems make it easy to keep track of income and expenditure, invoicing, salaries, and other expenses. They can be linked to your business bank account to enable fast and accurate reconciliation, and be set to send automatic communications like invoice reminders to customers. You can also produce some very useful reports that will help you see how to improve your business strategy. When it comes to filing your tax return, there are accountancy services available online that will either complete the return for you, or allow you to enter the data yourself and then check that everything has been done correctly before it’s submitted. Using these technologies can save a great deal of money compared to employing staff or hiring a CPA, so they can be an excellent choice for the small business owner.
It’s very easy to throw a lot of money at an AdWords or similar advertising campaign and have little to show for it. When you start your business, make use of all the free or low-cost marketing resources that are available first to establish your online presence. Social media accounts, writing for relevant blogs and publications, getting a word-of-mouth campaign going, and using online directories are just a few of the ways you can start publicizing yourself for little cost. Some paid advertising will be necessary for most businesses, but before you start spending, make sure you’ve done your research so you can target the right audience, i.e. the people who are most likely to want to buy from you. That way you will be directing your expenditure towards the adverts that are best placed to provide you the highest return on your investment.
There are ways to make small efficiencies that will save money in many areas of your business, and none is too small to ignore. Every penny you save will end up adding to your profits; it’s just a case of making the right decisions about where to make your savings.