There is nothing worse than the feeling that most small business owners are familiar with, checking your bank account and feeling that sense of disappointment at how low the balance is. It's frustrating, especially when we work so hard and put so much into our business.
Of course there can be lots of reasons why there is not money left, some of the big reasons, for example, not charging enough, not managing cash flow properly and simply not generating enough business to cover the bills But at the same time, I've found that there is a lot of money wasted by business owners because of 7 simple things that they fail to do.
Now I'm not saying these savings will turn a failing business around, but I am saying that you will be surprised at just how much money you can save by making a few simple strategies part of your daily routine.
1. Make the time to check prices on a regular basis
One of the problems we face when checking prices of services like power and telecommunications is that it takes time and it is generally a frustrating experience. But it's probably worth the effort if you can make a substantial saving. Look at the saving over a 12 month period and work out how much you've actually made simply by investing some time working to get a better price for a service or product you are already receiving.
2. Try the "when in doubt go without" approach
Often we buy new products or replace old items out of habit as opposed to there being a real need for them. Are there things you are buying that you really could go without? Recently I visited a large Japanese company and they actually asked their staff to bring in their own scissors and staplers - in the space of a year, they estimated that this simple gesture saved approximately $50,000. In other words, challenge habits and conventional thinking and reap the rewards. The staff in this case were very happy to chip in and do the right thing.
3. Work out how much particular items cost you for the year
Things like stationery and office supplies have a way of adding up. If your stationery bill is $200 a month, it's not really a big deal, but when you consider that to be $2400 per year, the shift in framing to an annual cost suddenly makes it a big deal. Work out the cost of everything in your business on an annual basis and realize just how much you are spending. It might make you negotiate a little harder or perhaps use a little less.
4. Whatever you do, don't pay late fees
Many businesses pay way too much in bank fees and credit card fees because they miss payment dates. Generally paying late fees is not related to cash flow, it is simply disorganization. The best way to avoid paying late fees is simply to take five minutes to set up automatic payments on your regular bills which could in turn save you hundreds of dollars a year.
5. Get everyone involved in saving money
Saving money isn't just up to you the business owner, it's the responsibility of everyone involved. But that doesn't mean that everyone will instinctively leap on the cost saving band wagon. Get creative, offer incentives, make saving money part of your daily conversations without becoming obsessed or downright mean.
6. Negotiate on everything you possibly can
I remember going into a big department store and watching in awe as my friend started to negotiate with the sales assistant to buy a microwave oven. I thought these big stores were not open to negotiation, apparently they most certainly are and in fact most businesses are negotiable. When it comes to negotiating, most of us tend to be quite conservative, but we might need to rethink this philosophy. By simply asking for a better price or a better deal, more often than not you will be rewarded with a discount.
7. Lousy record keeping is probably the easiest way to lose money, and lots of it
Poor record keeping and accounts is a sure fire way to lose money and many businesses are guilty of this, often because they don't value accurate records. When you do have great records, and you can see what you are spending (and earning) at the press of a button, a lot of changes. This current and accurate information gives you a much more engaged snapshot of the business at any time and we can be more proactive as a result of that.
Clearly, with a few simple changes, and a new way of thinking, most businesses would be able to save considerable amounts of money that could be better used elsewhere. Give it a go and see what impact this has on your business.