5 Ways Successful Small Businesses Save Money
As first published on SFGATE on May 3, 2018 by American Express
Starting a small business takes lots of elbow grease and capital—especially in ever-evolving San Francisco. It also takes at least a year or three before the business makes money.
To improve cash flow and increase profits, small business owners have to scrutinize every expense while maintaining a quality product or service. Here are five simple ways small business owners can keep expenses in check.
1. Buy in bulk.
If your small business uses a fair amount of office supplies, buy in bulk. Some bulk retailers and wholesalers don’t discount the bulk price, so comparison shop to make sure you get the lowest cost per unit as possible.
Also make sure to only buy products you use often. Bulk items that sit dormant in your closest won’t save you money.
2. Re-evaluate expenses.
Periodically review your business expenses to make sure you’re not spending unnecessarily. Even seemingly small deductions, such as credit card processing fees, add up at year’s end.
“Every few months we review our expenses to see if there is anywhere we can cut costs,” says Daisy McClellan, who co-owns Gather, a San Francisco boutique with her husband, Christian. “Are we really using ‘x’ monthly services to make it worth it or is it something we can cancel?”
Credit card transaction rates are a big concern for small businesses when they consider which credit cards to accept. To combat this concern, American Express introduced the OptBlue program where the merchant service providers now set the rate, which means businesses could find a better one. The program is designed to help small business owners find a rate that works for their business. Business owners also get the benefits of a single statement for all card brands they accept, fast deposit into their account, and one contact for all servicing needs.
According to Ramon Ray, small business expert and best-selling author, “The one piece of advice I always give to small business owners is to do your research when it comes to accepting payments. Speed and convenience are important. Ask yourself, do I accept digital POS payments? Do I accept American Express? Many small business owners may not know that American Express introduced the OptBlue program, which gives them the opportunity to find a competitive rate through a third party processor.”
“By accepting American Express Cards, you’re doing a lot more for your business than just making customers happy. American Express is an advocate of small businesses, and the OptBlue program and free marketing resources are just two of the ways in which they do it.”
3. Use cost-effective marketing and advertising.
You could spend several thousand dollars on one full-page glossy magazine ad. Or, you could launch a highly targeted social media campaign for $5 to $10 a day. Which gives you the most value for your dollar?
Small business owners have more ways than ever to promote their business at little to no cost. In addition to low-cost social media ads and pay-per-click campaigns, you can launch marketing campaigns on your Instagram and Twitter account for free.
Other low-cost marketing ideas include guest blogging on a popular site, in-person networking, and in-kind sponsorships for local charity events.
While you’re developing your marketing plan, review any marketing opportunities provided by partners who are invested in your success. For example, American Express offers a number of programs that help business owners connect with more customers at no cost. One of the ways they do that is by providing free open/closed signs, hours of operation decals and other items to show that credit cards are accepted. They also recommend small businesses to Card Members who shop at businesses like theirs.
One of the other, perhaps more well-known ways American Express backs small businesses, is its creation and championing of Small Business Saturday. Nearly in its tenth year, Small Business Saturday encourages consumers to support small businesses at the start of the holiday shopping season.
“Last year during the American Express Small Business Saturday campaign, they named Gather a neighborhood champion and sent us all sort of wonderful swag to share with other locally owned shops in Hayes Valley to celebrate the event,” says McClellan. “They’ve been wonderfully supportive!”
4. Use software.
Business management software can save you time and money by streamlining back-office processes. Depending on the software, you can track key business metrics, log business transactions and keep track of your customers.
Accounting software, such QuickBooks, helps you track income and expenses, send and track invoices, and monitor profit and loss. Many programs are easy for non-accountants to use, saving you from hiring a bookkeeper for many tasks.
Need a website? If you only need the basics, build one yourself for free using free website building resources that provide templates that make it easy for you to build a professional-looking website.
5. Be energy efficient.
For the good of the planet and your bottom line, consider energy efficiency throughout your operation. LED light bulbs cost more initially but last about 200 times longer and use about 80 percent less energy than traditional incandescent bulbs.
Save money on paper and printer ink by moving to a paperless office using services in which you can e-sign and send documents.