14 ESSENTIAL tips to save money as a small business
As a small business, you’re always looking to save money – and to become financially efficient is integral to your business model. Saving money as a small business can be imperative to the early days where you need to be spending every penny wisely.
Here are our top tips to save money as a small business owner. Pick and choose a couple of ideas from the list to implement as you see fit.
Our top tips to save money as a small business owner
Here are our top tips on how to save money as a small business owner. From saving money on business utilities to reducing your marketing spend by creating low-cost, efficient marketing activities.
Here’s our breakdown below of the top tips to help you save money as a small business owner.
Outsourcing is a great way to save money as a small business. It also provides you with experienced freelancers who will be able to accelerate the growth of your business at a reasonable price.
Small business owners often think they need to do everything themselves, but bringing in the experts will save you in the long run as you’ll be able to focus on your core product offering.
One thing to note is that when working with freelancers, it works both ways. You will need to provide them with a detailed, in-depth brief of your project to understand what is being asked for and produce high-quality output.
A poor brief may also put off some high-performing freelancers, so you must ensure that the first touchpoint with them is detailed.
A great case study is Deborah Sweeney. Deborah, who is the CEO of My Corporation Services, Inc., always outsources her work.
Her reason for this is that by hiring consultants, she can negotiate better rates, and their much more varied experience in their field of expertise is highly beneficial.
Our recommended sites:
But if you do hire, hire smart!
By this, we mean hiring smart people looking to break into your industry or starting a career in the job role you’re looking to fill.
Not only does this save money on wages, but you’ll also have someone who is hungry to learn, develop consistently and most importantly, will produce top quality work for your business.
This will also allow them to grow with the business and accelerate their development, which is a huge selling point for any employee. You, as the employer, will benefit from a high performing, loyal employee who’s helping you scale your business to new heights.
Don’t always look at the last job role of a candidate; look at the person’s general skill set and what they have to offer.
Hire interns and sandwich year students.
This links to the point above on hiring smart – businesses will benefit from hiring sandwich year students or interns as they’ll be interested to learn, inquisitive and relatively low cost.
It allows the intern or student to learn the role and the industry in depth. It doesn’t take them too long to get up to scratch on the job role and the industry – with high levels of motivation to learn and succeed.
They’ll always be intrigued and look to make improvements to the process of the day to day role – precisely what you want from your employees.
Take advantage of the apprenticeship levy.
All UK employers now pay the apprenticeship levy through the PAYE scheme. When collected, the apprenticeship levy will be held for 24 months and will be lost if you don’t use it. Make sure you are taking advantage of this free money to upskill your current workforce.
The levy isn’t just for hiring apprentices directly from school, which isn’t appropriate for all businesses. Professional colleges, such as Kaplan or BPP, will now accept payments from the levy where you are funding courses for your employees.
This is not only a massive benefit for progression hungry staff but gives you a more qualified workforce.
Grow your network.
Growing your network is pretty important; whether it’s a potential customer, a partner or even an advisor, these relationships are crucial to growth.
Building these relationships can help you accelerate the growth of your small business at a relatively low cost.
The perfect place to reach out for these initial partnerships are platforms like Linkedin and even some niche subreddit groups within your industry.
When reaching out to people, especially in the forum space, make sure to be polite and be open about what you have to offer and how you could also benefit that person.
Also, answering questions in these forums will start to build credibility, and you never know who’s lurking. Be helpful, always offer something and never, never link spam. You’ll never get anywhere with that.
A perfect example of reaching out to someone in LinkedIn is to add them as a connection and tell them why you want to connect with them. Melonie Dodaro provides a great step by step on “Best Practices For Building Relationships On LinkedIn”.
A quick summary of Melonie’s article is to:
- Tell people why you want to connect
- Look for commonalities
- Respect people’s time
- The power of reciprocity
- Take your offline approach online
Some pretty good advice if you ask me.
Compare and save on your utilities.
As a business, a large portion of your expenses is attributed to some form of business utilities. Whether their business energy suppliers or your broadband suppliers, you tend to become comfortable and only switch it once.
The cost of these utilities tends to creep up year on year without any form of review. All you need to do is simply go to a comparison site and check out the latest rates for these utilities and ensure you’re not paying too much for them.
You’ll find a lot of savings for your business this way.
Nearly 58% of the UK’s businesses have never switched their water supply since the deregulation of the water market in 2017, missing out on the chance to save a lot of money and consolidate your bills.
Look to implement digital marketing > Traditional marketing.
Look to implement digital marketing strategies over the old school way of marketing. Firstly because you will be able to save money on traditional advertising. Traditional advertising, both TV and print, is incredibly expensive, and most of the time, you have no way of determining the actual return on investment.
Whereas with digital marketing, you can view the details of your ads, from how much they cost to the number of conversions directly on that ad. It allows you to push more money into more efficient advertising opportunities and increase sales, saving you money in the long run.
Track your metrics constantly; make sure you measure what’s working and what’s not. The strategies that work put more time and money into those – it’ll grow your business and help scale it quickly.
This moves us on to SEO.
SEO strategy is key to growth.
The best part about SEO is that it’s free; it’s the perfect ingredient to building a long term acquisition strategy.
Make sure you outline a solid SEO growth plan and stick to it. It can be tough at times, as SEO isn’t something that boosts traffic overnight. It takes time, thorough research, building quality content, useful resources and securing quality backlinks.
Financially it’s free of charge, and the only commodity you will spend on this is time, but the return is enormous.
It’s a long term strategy, but if you stick to your plan and develop interesting and unique content that serves a purpose, you’ll begin to rank much higher for the search terms.
Try to build out multiple topics within your article and create smaller articles that link back to the larger article to help build quality internal linking.
Finally, make sure to grow your email list. It’s the perfect way to market to potential customers and even upsell if you have multiple products.
A newsletter subscription form is perfect for companies that help nurture a contact throughout the buyer’s journey.
Ultimately, in the long run, it will work as one of your best performing sales channels; it develops brand loyalty, and overall improves customer experience with you as a business.
It’s also completely free, so it costs you absolutely nothing to create and will help you achieve sales. If you scroll a little further, you will see our breakdown of the best free tools; one of them is Mailchimp who offers a pretty decent free of charge service – I highly recommend using these whilst growing your small business to the next level.
Forming partnerships is integral to your growth as a small business. How does it save you money as a small business, you may ask?
Well, creating partnerships with other startups cut costs and also increase your audience reach.
For example, if you partner with another business, you can offer them a service that will help grow their business and vice versa. An example, if you were an accounting software startup and you partnered with a CRM startup.
You could 1. Swap software and save money as they’ll need accounting software, and you would benefit from CRM software.
And 2, you could cross-promote to each others customer base via an email campaign. This would benefit both businesses and help you grow your audience and save on software costs.
This would work for similar businesses in any industry; just reach out to the right partners with your offering and how you could help them. That will get the ball rolling – and hopefully the start of a fruitful partnership.
Utilise open-source software, free tools and apps.
Familiarise yourself with them first. Using free tools and apps is an excellent way for you to save money as a small business. However, we recommend you familiarise yourself with these tools and then decide which tool will help provide you with the best solution to overcome your stumbling blocks.
Here’s a list of free tools we would highly recommend:
- Canva – You’ve probably already heard of it, but the free version is brilliant for design.
- Figma – Collaborative design tool.
- Feather icons – Create cool, open-source icons.
- Dribbble – Discover the best designers.
- SparkToro – Free audience research tool.
- Hunter – Find email addresses in seconds. Go directly to the person you need. Perfect for partnerships.
- Snov – sales automation software.
- Snazzy – Create content in seconds – powered by AI.
- Tally Forms – Create forms for your site for free.
- Weld – Connect your ad networks to Google sheets. The Perfect comparison tool for ads.
- Notion – The place to go for notes, tasks and company policies.
- Slack – yep, you already know this one. Slack is the perfect internal messaging tool, and you can run it for free.
- Whimsical – The ideal tool for collaborating with your colleagues, where ideas are born.
- Sublime Text – Text editing tools.
- VS Code – Code study to help build code and debug code.
- Github – Free software builder.
- Vercel – cool frontend development software.
Pick and choose from these free tools to help grow your business without paying extortionate rates. We recommend trying out one or two tools and then growing your stack as you master each one.
Think about what will help provide you with a solution to any of your initial stumbling blocks, and begin to master them.
Buy used equipment.
This, for some reason by most small businesses and start-ups, is overlooked. Second-hand equipment can save you 40%-45% of the original cost of the equipment and works just as well.
Refurbished computer equipment works perfectly and will keep your initial equipment costs down. Our preferred refurbished computer equipment suppliers are:
It’s a great way to save money as a small business, as it allows you to spend money elsewhere whilst maintaining a high standard of equipment.
Cut office costs – Embrace remote working.
Since Covid happened, the whole world has experienced remote working, and the realisation of how expensive it is to have an office, whilst your employees are more productive at home.
With the latest technology for online calls, collaboration and project management – it seems crazy to be spending money on an office that doesn’t have too much use.
Review your current setup, and if you can go fully remote whilst maintaining the levels of service, we highly recommend it.
It will not only reduce your small business expenses, but it will also improve the quality of life your staff will have.
Review monthly/annual subscriptions.
Review renewal terms on annual premiums – e.g. software, insurance, energy bills. It’s always worth reviewing the cost of your subscriptions, as some will fall by the wayside as they’re either incomplete or not being used to their potential.
This is when you should review the ROI of your subscriptions. It doesn’t always need to be monetary, but if a software subscription has been dormant to present – don’t feel obliged to keep it. You’ll save so much money adjusting subscriptions that you’re not using to the full capacity.
This will provide long term cash savings that will help you save money as a small business and can be invested elsewhere to help grow the business efficiently.
Use energy-saving devices in the office.
Honestly, it’s incredible how much electricity your lights in your office use. It amounts to around 40% of your electricity bill.
Make sure you replace your current lightbulbs with LED is as they are both great for the environment but highly cost-effective to use due to the low levels of wattage needed to run them per hour.
You should also add movement sensors into rooms with a large amount of light, as after-hours employees may forget to switch off the lights leading you to pay a hefty price for them being left on overnight. These devices are easy to fit and relatively low cost. They’ll save you a lot of money in the long run.
Look at other power-saving devices, like a smart timer on high usage equipment (i.e. commercial printers).
Save on your shipping strategy.
If you don’t need to deliver physical products, then this tip is not for you. But if you run a business that ships products daily, this is definitely for you.
There’s huge pressure on businesses, even small startups, to offer free shipping. Having a paid shipping or delivery cost can put off potential buyers. But the question is, do you offer free shipping?
And, if you do – do you absorb the costs or do you pass the cost onto the buyer by including it in the product’s margin?
We recommend absorbing half the cost yourself and absorbing the rest within the product’s markup.
But, we also recommend negotiating with your logistics company.
They charge huge amounts for delivery. Yes, occasionally, they are working to fine margins as well – but if you’re able to promise them more business as you’re a growing startup, there will be room for negotiating the postage costs.
It’s another service that you must negotiate once in a while or at least shop around for other solutions. But remember, if they’re doing an excellent job, maybe stay with them and try to negotiate the cost a little. You do not want to jump to a cheaper solution that screws you over, so consider that.
There’s no harm in asking the question – the worst they can say is no, they won’t cut you off, we promise.