We recently discussed the importance of maintaining an emergency fund to see you through hard times. These savings also make reserves available to take advantage of good buying deals.
Unfortunately, small businesses are not typically flush with extra cash to devote to savings. The good news is that there are ways to save without feeling too much pain — as long as you carefully identify even small amounts of extra cash and put the money away.
When you exercise some discipline, you will better recognize when extra funds are available for saving. Here are some ideas to get you started.
#1. Eliminate Unnecessary Spending
Think twice before spending on too many nice-to-haves. Buying new workplace holiday décor is out of the question, but decent office supplies remain important. New delivery trucks may not be justified when a little maintenance will keep your current ones reliably operational longer.
Since making more money increases the funds available for savings, spending on productivity tools and systems is generally important. Will employees get back to productive work more quickly with efficient meetings? Maybe you can identify affordable ways to improve production processes.
Of course, spending on employee morale falls into the must-have category. There are creative, lower-cost solutions for keeping your employees productive and happy. In fact, an inviting open-door policy improves morale for free, while encouraging great suggestions.
#2. Get Creative to Save on Marketing
Most businesses have to spend money on marketing campaigns. You won’t increase your customer base if your company is the best-kept secret in town. Still, you don’t always have to spend top-dollar. Here are a few suggestions of lower-cost ways to publicize your business:
- Boost your message on required mailings: You are required to send some documents out (paper or electronic versions), so put a notice of a sale or new products on your invoices, shipment packing slips, and even the signature line on your emails.
- Take full advantage of social media: You already know about social media advertising, but you can sneak in advertising messages just about anywhere. For example, whenever appropriate, place a marketing message within your responses to customer tweets.
- Get free press: Don’t wait for reporters to contact you. If you can contribute to potential news stories, be sure to suggest it to the media. An interview about your company’s contribution to reduce emissions, or mentioning the food or other goods that you donated to a local hospital gets your business’ name out in a positive way — and encourages the public to buy from you.
- Seek help from existing customers: Don’t be shy about asking for referrals. Even if you compensate customers by offering future discounts or other perks, you will spend little money for high-value word-of-mouth advertising.
- Share marketing costs with compatible businesses: Can your auto repair shop work with an auto parts store to get the best results for customers? These two types of business might seem like direct competitors. But, if your shared advertising message stresses the importance of distinguishing between do-it-yourself jobs versus expert support, you might be able to develop one ad that supports both businesses.
#3. Make Your Current Space Work Harder for Your Business
We already pointed out that there are ways to stretch the office space that you currently have. If you can forego larger rent or mortgage payments by staying put a bit longer, you can put the money you save into the emergency fund. When a move becomes a necessity, that extra money can be a significant comfort.
#4. Look for Free or Low-Cost Software
When it comes to setting up the books or other critical tasks, saving money takes a back seat to doing the job right. But, a search for “free business software” reveals many lists of inexpensive or free software that can effectively support many areas of your small business. Some software, such as QuickBooks®, offers free trials or conditional discounts. (Hint: They’re offering a massive Cyber Week discount now if you act quickly.)
#5. Form Savings Partnerships With Neighboring Businesses
All businesses have certain resources that they require, while using other things on a sporadic basis. If you need a piece of equipment (like a color laser printer) on rare occasions, a neighboring business might let you stop by for a quick print job. Similarly, if they need to fix something for which you can supply the hand tools, you can loan them out.
You might have to pay for the usage, but you’ll probably save more than buying seldom-used equipment for your business. Even if they don’t ask you to pay, make an offer to compensate them up-front. Surprisingly, many business owners find that this type of generosity instills reciprocal generosity from businesses that then refuse payment for first-time use.
#6. Encourage Your Entire Team to Carefully Track Every Saved Dollar
Human nature dictates that higher savings account balances create the temptation for more spending. The best thing to do is to quickly segregate emergency funds into a separate account. But, how do you accurately identify that extra money? You have to judiciously track it.
This should be a team effort. You can provide online access to report savings. But, a low-tech Savings Board placed prominently in the workplace might offer additional benefits. It provides all employees with a more visible place to jot down any money that they saved by doing more with existing resources rather than requesting the purchase of new supplies or equipment.
As an added benefit, team involvement is good for morale. This simple tasks makes them feel more invested in the company, while reminding them of how they add value.
The Creativity of Your Team Can Help Build Your Savings
Never discount the value that teamwork brings to your business. You may never see ways to save money as well as the people who work closely on specific details every day. Your partners may be your employees, or even outside vendors and business partners. The right conversations with your entire team can unleash creative ways to save money now to meet future emergency needs.