Business Finance

Saving Money: Guide for Small Businesses

Jan 24, 2023 • 10+ min read
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Table of Contents

      Imagine for a moment that you were given an incredible choice: your business would either be able to either save more money or make more money this year. Once you made your decision, the proper strategies would magically be put into place and you’d begin enjoying the results.

      Which would you choose?

      It’s understandable that many small business owners would likely choose to make more money. After all, life becomes easier when you have more cash coming through your front door each month—and you could use the increased revenue to pay down debt faster or employ more expansion initiatives, which could potentially make you even more money.

      But I’d choose to save more money. Why? Because cost-saving initiatives can have a longer-lasting impact than those that boost sales. Your customers (and your potential customers) will always be finicky. Their tastes change and their spending habits evolve—so the incredible sales strategy you launch this year could actually fizzle out the next.

      Not so with cost-saving strategies. Sure, there is still variance in this realm: costs will gradually increase over time, punctuated by the occasional spike that can cause real issues for your business.

      But when you’re able to put effective cost-saving initiatives into place, they can have real staying power because they won’t be subject to as many of the fluctuations as your sales efforts. And the money you save each month can be applied to any number of worthwhile areas, including your money-making efforts.

      As we’ve seen with the Great Recession and the profound challenges brought upon the world by the COVID-19 pandemic, it’s essential for businesses to have savings in place. And reducing the money you’re spending each month is a great way to build such a reserve.

      “Robust savings insulate your company from unexpected emergencies,” says business guru Ken Gosnell. “Every business has dry seasons where sales become difficult and cash is drained…The wise business owner prepares today for the unexpected tomorrow. Organizations that withstand the test of time understand there will be times when they will be tested. These tests come in a few different forms, with changes in the market being the most common. Consumer tastes change, and new entrants come into the marketplace. Robust savings grant companies time to understand the market changes and respond in a way to retain and attract new customers.”

      There’s no doubt that saving money gives you options. You can hold the extra cash as insurance for an uncertain future or invest it in business-growing strategies that’ll put you in a stronger position for the road ahead. The best approach is a hybrid, where you put your money to work for you right away and also retain some to ensure that you’re prepared for the uncertainties of the future.

      Crucial Considerations for Saving Money

      As human beings, we have a tendency to seek out silver bullets. I’m referring to the idea that 1 simple solution can deliver the robust results we desire. A prime example of this phenomenon is the weight loss or muscle-building products you see advertised on late-night television. You know the pitch: use this product (pill, powder, serum, etc.) once a day, and you’ll reach your health goals within 2 weeks!

      The appeal of these alleged solutions makes sense. We’re busy and often lack the time and discipline required to accomplish great things—so a silver bullet seems like a surefire choice.

      But the concept of silver bullets is pure fiction. Literally, they appear in stories about werewolves, demonstrating their tenuous relationship with reality.

      Research published in the Harvard Business Review reveals the importance of a multi-pronged approach to saving money. In essence, you should trade your silver bullet for a quiver full of arrows.

      The report advises business owners to “forget about finding a single idea” that would magically bring the savings you’re seeking. As the authors point out, even if you could somehow discover the proverbial silver bullet, it would probably be so risky that it would have the potential to cause serious damage to your business.

      In order to minimize risk and get the best results, you should look for 10–12 strategies. This doesn’t mean that you should casually try a grab-bag approach: each option should be chosen after due diligence because you can simultaneously use precision and diversity.

      The next nugget of truth from the Harvard Business Review report: you should pay close attention to the disruptive potential of your various strategies. There will always be a corresponding relationship between the amount of money an initiative could save and how significantly it will impact your operations.

      “Therefore,” says the report, “you should tailor the reductions you pursue to your savings goal. Incremental ideas with minimal impact on other departments can allow you to trim up to 10% of costs. Redesign or reorganization ideas often eliminate the lowest-value activities, with moderate impact on other departments, and can help cut expenses by up to 20%. Cross-department and program-elimination ideas are usually necessary when you’re aiming for 30% or more, but they have the greatest potential to be organizationally disruptive.”

      The overall takeaway from this research: you should be deliberate in your strategies. Impulsive cuts to employee benefits, for example, could easily lead to impulsive reactions from your employees. And the last thing your business needs right now is more turmoil.

      Cost-Saving Strategies to Consider

      Now that you have the game theory needed for meaningful savings, let’s look at some of the best ways to reach those goals. After all, this wouldn’t be much of a guide if it didn’t provide you with actionable items.

      This list represents a wide range of cost-saving strategies. Some are low-hanging fruit and could be implemented over the weekend. Others are more ambitious and require plans to put them into place effectively.

      With no further ado, here are 20 tips for saving your business more money.

      1. Pay Your Bills Early 

      It takes preparation and discipline to make early payments, but the savings can really add up. Talk to your suppliers, utility providers, and various creditors to find out if they offer a discount when you make a payment before the deadline. You’ll be surprised how often you’ll be able to score discounts. To ensure that you earn every discount possible, you’ll just need to create a calendar reminder or automate your payments.

      2. Ship Early 

      Just as you can save money by paying bills early, you can often cut costs by sending your mail out first thing in the morning. By timing your shipments, you can get letters and packages on the road faster—and this often means you can save money by not paying for expedited shipping and first-class stamps.

      You should also take the time to review your mailing lists and purge any incomplete or redundant entries. Get rid of those who no longer fall within your target audience. When you need to call in the big guns, the USPS provides multiple resources for catching issues and updating addresses.

      3. Be Efficient in Your Mailing 

      You could also partner with 1 or more other small businesses to send mail together. Co-mingling mail can empower you to score shipping discounts and make fewer trips to the post office.

      4. Partner Up on Advertising 

      You can use this same networking approach for your advertising. For example, you could partner with several businesses on your street to hold a special sale on the same day. Additionally, you can join forces in your outreach by merging your mailing lists and reaching a whole new audience.

      5. Reduce Your Solo Advertising Efforts 

      Another way to find strength in numbers: avoid sending out standalone mailers and other collateral. If you already plan to send out contracts, invoices, or other correspondence, consider adding an advertising piece in the envelope.

      You can use this same approach at the point of sale. For example, if you have a brick-and-mortar location, you could add marketing fliers to customers’ bags when they’re checking out. Any opportunity to eliminate the need for shipping saves you both time and money.

      6. Refill And Recycle Your Cartridges 

      Buying ink for your printers is hardly the biggest expense that your business has to deal with, but it might just be one of the most annoying—so you should do the earth a favor and cut costs by refilling your cartridges.

      If you find the refilling process is taking a toll on your print quality, you can still seek out methods for recycling your cartridges. It’s a great way to extend the earth- and wallet-friendly benefits of refilling.

      “In some cases, you can get money in exchange for your old ink cartridges,” says Small Biz Trends. “Sites like eCycle Group let you send in your own cartridge and will issue payments to you at the end of each month based on the items you send. Prices from eCycle Group range from $1 to $15 for various cartridge models. But even those small contributions can make a big difference for your business over time, especially if you print large volumes and tend to go through a lot of cartridges.”

      7. Work From Home More Often 

      Some businesses must be carried out onsite at all times—but if your operations could be split between the office and home, or maybe even moved home permanently, you can save substantial money. For example, you could switch to a smaller office space and spend less on utilities and other operating expenses.

      8. Maximize Your Tax Deductions and Credits 

      If you do end up working from home permanently, there are some significant tax deductions that will come into play. You can deduct a portion of your utilities, HOA fees, maintenance, mortgage interest, rent, and other home-related expenses.

      Regardless of where you’re working, there are plenty of other relevant tax deductions and credits. Talk with your tax advisor to make sure that you’re taking advantage of all the opportunities available to your business.

      9. Seek Out Used Equipment 

      Whether you need office furniture, forklifts, or a box crusher, consider buying your equipment used. Peruse online auctions and classifieds to find the best deals. Another excellent option: taking the government route.

      “Government auctions are much more convenient than in the past,” says a business report from The Balance Small Business. “Government auction sites such as GSA Auctions are host to many used governmental industrial and service items small businesses could use. Generally, they post pictures and video of the items being auctioned so you can view the condition it is in.”

      It doesn’t matter if you get your used equipment from a neighboring business or an FBI field office in Virginia—only that you obtain quality equipment at a huge discount compared to a new purchase.

      10. Lower Your Insurance Premiums 

      Insurance is a must for small business owners, but that doesn’t mean you can’t cut some of its cost. Talk to your various agents about possible discounts—for example, you can save big by bundling. And you might qualify for a loyalty bonus if you’ve been with an insurance provider for an extended period of time and haven’t had any claims.

      Another strategy is to increase the deductible on your policies. This is a bit of a gamble, but you’ll pay less each year on your premiums. Over time, you’ll reach a point where even if you had to pay the increased deductible, you’d still be saving money.

      11. Use Software Without Cost 

      Did you know that there’s a whole world of free software out there? It often boasts comparable features to the expensive software most of us are used to, though it might look a bit less polished. Of course, when you’re looking to save money, you can deal with a few compromises.

      “Software can be expensive, but free programs have been a mainstay of the desktop experience for decades, and today’s offerings are pretty powerful,” explains tech expert Eric Griffith. “Software developers can adopt an ad-based model, donation-ware to keep things afloat, or a shareware/freemium model that charges for extra features. Something to always watch for: crapware installers. To make ends meet, many creators of otherwise great free software, or the services that offer the programs for download, bundle in things you don’t want. Worse, the installation routine obfuscates the steps, so you provide the unwanted program tacit permission to be installed…A pro tip: only download desktop software from the maker of the software directly.”

      As long as you stick with developer-direct software downloads, you should be able to avoid unwanted software and get some awesome products at no charge.

      12. Avoid Lawsuits Like the Plague 

      The last thing your business needs is to become entangled in a lawsuit. There’s no such thing as a guaranteed protection against legal issues, but you can help to cut them off early by being a conflict resolver. If you receive complaints or accusations, don’t delay in responding. Show humility in your communications and seek for amicable resolutions.

      13. Barter and Trade 

      There’s usually more than one way to acquire the items your business needs. Bartering is a practice that has been around for thousands of years and can help you avoid unnecessary costs. For example, you might have unneeded equipment or unpopular inventory that could be exchanged for something of real value to your business.

      You can reach out to businesses in your network to discuss possible trades, or you can go with a service such as the National Association of Trade Exchanges (NATE). Through NATE, you gain access to helpful infrastructure and a vast membership for possible bartering opportunities.

      14. Seek Savings in Numbers 

      You should consider partnering up with other friendly businesses in order to score discounts through bulk ordering. This can be a powerful way to save money and build lasting connections within your industry.

      Another option: become a member of a trade association. Not only can you receive wide-ranging discounts through an association, but you’ll also connect with other business owners who could become allies in your cost-saving pursuits.

      There are almost always dues required for membership in business and trade associations, but if you do your due diligence, you can ensure that the value outweighs any cost.

      15. Never Agree to the First Bid 

      Small business owners rarely have a lot of free time on their hands, so it’s understandable why we sometimes avoid the trouble of getting multiple bids for purchases—but your first bid will rarely be the best, so it’s imperative that you track down at least 3–4 bids for any major purchase.

      Once you’ve received the lowest bid, review your options. If you would prefer going with one of the higher-priced vendors, don’t hesitate to call and ask them to match the lower price.

      16. Don’t Run Your Own Servers

      Unless your main line of business has to do with IT, there is no reason why you should maintain your own servers. In fact, it would be very unwise to have to deal with software issues either.  The cost effective alternative is to avail of cloud based services which does not cost anything in terms of equipment and software purchase.  It is cheaper to use cloud based servers, storage and software because these are offered on pay-as-you-go basis.  This means you only pay for the services you actually use.  When the time comes when your business needs more capacity, all you need is to notify your cloud provider and they will scale it up for you. You will realize additional savings because you will not need an in-house IT systems administrator.

      17. Take a Closer Look At Your Contracts

      Review all your contracts and look for anything that will translate to savings. One of the biggest contracts you’ll ever have is the one for business space lease.  Compare your contract to prevailing market prices and terms, and then try to negotiate a rate reduction with your landlord.  You will never know what is possible if you don’t at least give it a try.  Then there are various supplier contracts.  In this day and age, it is quite easy to find similar suppliers for comparison through simple internet searches.  By showing your suppliers you have alternatives you may be able to convince them to give you better terms and prices.

      18. Outsource

      Outsource as much of your non-core activities as you can. Just as you are an expert in your main line of business, other companies would be experts in other fields.  Trying to do everything in-house will be more expensive and distract you from the income generating aspects of your business.  Some of the things you can outsource include accounting, payroll, tax, and temporary or seasonal work.

      19. Try Digital Marketing

      Try non-conventional modes of advertising and marketing to save costs. Advertising and marketing through websites cost a lot less than gigantic billboards, events, or TV ads, yet they are very effective; many people do an internet search before deciding to buy anything.  Social media campaigns are also highly effective because many people keep smart devices at hand almost 24/7.

      20. Know Your Customers

      Learn to serve your customers better. Get to know what your customer likes about your products or services and how they want them delivered.  Then you can gear your processes toward better and more efficient product or service deliveries.  This is sure to cut down on customer dissatisfaction and reduce sales returns.  As a bonus, this will help you build a loyal customer base.

      21. Use A More Efficient Font For Printed Documents

      For companies that print a lot of documents, simply choosing a slightly smaller font size could mean thousands of dollars of savings on a yearly basis.

      This is because smaller fonts use less ink to print. The reduction in ink consumption per document may be so small that it’s negligible, but these small savings accumulate over time. For a benchmark figure, the Fox Chapel Area Senior High School already conducted a study and found that they saved over $21,000 in a year on printing costs simply by making teachers switch to a more efficient font.

      It’s not just the size of the font that has an effect on reducing printing costs – the type of font used is also a factor. Less complicated fonts like Sans Serif are more efficient than highly stylized typefaces.

      Five Minute Exercise: Work with your brand manager/designer to find a smaller font that’s more efficient.

      22. Minimize Paper Usage

      If minimizing ink usage while printing saves a company a lot of money, then you can save even more by avoiding paper usage and foregoing printing altogether. Instead of printing office documents and memos, your company can choose to share documents through email or local network.

      One example is handouts normally printed out and passed around during a meeting. It is faster and more cost-efficient to just ask employees to bring a device to the meeting room and open up a document containing the reading materials. Alternatively, the text can be projected on a conference room using a projector.

      You can also offer to send electronic invoices to clients instead of relying on hard copies. This will help you save on both paper costs and physical storage costs. It can also increase productivity, because it takes a lot less time to send an electronic document compared to printing hard copies for manual delivery.

      Five Minute Exercise: Ask your employees to just bring digital copies to meetings, and see if it works for your company.

      23. Take Advantage Of Bundled Services

      It’s normal for companies to choose high-end packages when procuring services from third-party companies. What most companies don’t realize is that they’re wasting money because not all of these products serve a function that is mission-critical. A company can save money simply by going for cheaper yet lower performance products. And you can save money further by getting these services for free through bundled services.

      This money saving tactic is applicable to a lot of office supplies and needs, particularly with regard to IT products such as Internet access, phone subscriptions, and faxes. Many ISP providers have bundled plans that include one or all of the aforementioned services free of charge.

      Five Minute Exercise: Call your service providers and see if they have a bundled plan.

      24. Hire A Disabled Or Returning Veteran

      The hiring process is usually not seen as an opportunity to save money. A business owner will almost always go for potential employees with better skills and longer experience, even though they have a higher asking price. But if your company is based in the U.S., there is a simple hiring choice that will entitle you to thousands of savings in tax credits: hire a disabled or returning veteran.

      The U.S. has two notable programs that encourage businesses to hire returning soldiers. First is the Returning Heroes Tax Credit, which gives businesses a max tax credit of $5,800 for hiring a veteran. Next is the Wounded Warriors Tax Credit, which entitles a company to a max tax credit of $9,600 for hiring a veteran with service-related disabilities. You get the employee you need, you get thousands in tax credits, and you get to help the people who risked life and limb while fighting for our country.

      If your company is based in another country, it helps to check if your government offers similar hiring-related tax incentives.

      Five Minute Exercise: Work with your HR department to create a veteran hiring plan.

      25. Lease Equipment

      A big company will most likely have a few bulky equipments lying around gathering dust. These types of equipment are not used frequently but serve an important function from time to time, so getting rid of them in an effort to save on upkeep costs is out of the question. Examples include legacy factory machineries, server farms, large-scale printers, construction equipment, and even company vehicles.

      If your company has these types of bulky seldom-used equipment lying around, you can earn extra revenue and save on maintenance costs by leasing them out to other businesses. All you need to do is create a contract that requires the lessee to shoulder maintenance and repairs during their use. If needed, you can reduce the rent cost in exchange for this stipulation, and you’ll still come out ahead.

      There is also an option to apply the same principle to office space. If there are unused spaces or areas in your office building, you can earn extra revenue on the side by renting it out to other companies.

      Five Minute Exercise: Make a list of all equipment you could lease.

      26. Ask For Discounts And Referrals

      If your company gets products or services from third party suppliers, you can fish around for discounts even if the supplier is a small outfit compared to your business. If you have a good professional relationship with the supplier, they are more likely to offer discounts. And if you’ve been giving them good business regularly, they may even provide custom-tailored discount rates just to keep you on board. These discounts can come in many forms, but the most common are reduced rates and value-added extras.

      This cost-saving measure can also extend beyond a single supplier. If you get in their good graces, you can even ask for referrals to other suppliers in their network that could give you similar discounts for other products or services. This is a win-win situation for both sides, because you’ll save even more money while they can strengthen their network reputation with referrals.

      Five Minute Exercise: Make a list of contracts that are about to renew, and consider asking for a discount.

      27. Use Direct Deposit or Debit Cards For Payrolls

      You can also save a lot of money for your company by using debit cards or direct deposit for payrolls instead of checks. The savings are from eliminating expenses associated with checking – such as the printing of the check itself, the envelopes used, the storage, and the reduced efficiency associated with manual issuance.

      There are also savings related to reduced risks with regard to fraud. According to the Association of Certified Fraud Examiners, over 60% of all fraud-related incidents in businesses involve employees. The use of a debit card or direct deposit gives the employers more control over the flow of money and greatly reduces fraud-related loss.

      Five Minute Exercise: Talk to your payroll people about setting up direct deposit.

      Putting Tips Into Practice

      You definitely have the ability to cut your costs this year. And the savings both big and small will add up to more opportunities for your business. 

      So start today. Savings measures don’t do anything for you until you put them into play. Once you make your moves, you’ll be able to watch your expenses begin moving down rather than up—and that’s a beautiful thing.

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      About the author
      Grant Olsen

      Grant Olsen is a writer specializing in small business loans, leadership skills, and growth strategies. He is a contributing writer for KSL 5 TV, where his articles have generated more than 6 million page views, and has been featured on and Grant is also the author of the book "Rhino Trouble." He has a B.A. in English from Brigham Young University.

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