Ways for Small Business Owners to Save Money

It has been estimated that 90% of newly established businesses fail. This is reason for concern.

Contrary to popular belief, start-ups do not fail because they are risky. They fail due to the fact that their owners concentrate all their attention on sales and forget about expenses. Without the necessary capital, they are not able to pay staff wages or suppliers on time. There needs to be cash to finance business operations, as well as expansion.

Small business owners have yet to understand the importance of making the most efficient usage of their resources. In order to achieve financial goals, it is necessary to make the most of the available supplies and save money. The potential for making savings is there. It is just that owners do not see it.

Here are a few suggestions as to how to get started with saving money.

Nest smart thermostat

Reducing power consumption

Saving energy translates into saving money. Energy costs money, so reducing power consumption is in order. Power companies that are based in the East and West Midlands offer consumers the lowest tariffs per kWh. Au contraire, power companies in Wales have the highest charges.

By taking simple steps to improve the business’ energy efficiency, it is possible to save up to 30% on utility bills. This is what a small business needs to do so as to reduce energy costs:

1. Turning off computers and laptops

Simply switching off these devices results in considerable power savings. It is true that computers and laptops are not the biggest consumers of electricity, yet having them idle is not a good idea. A PC, for instance, can use up to 250 kWh per year. This amounts to a lot of money per year. Ideally, the gadgets should be powered down completely when not in use.

2. Installing programmable thermostats

A programmable thermostat is designed to change the temperature according to certain settings. It is thus possible to set the thermostat lower and reduce power use. As surprising as it may seem, maintaining the temperature 1 degree lower than usual can reduce the energy usage by 10%.

3. Consider the water usage of the office

Entrepreneurs do not ever realise that there are numerous water conservation opportunities. Saving water is good for the environment and the wallet of the business owner. Old water heaters should be replaced with tankless systems. It is advisable to talk to the staff concerning saving initiatives. Maybe they have some interesting proposals.

Accountant working on small business taxes

Handling taxes

Small companies have the tendency to overpay taxes. Overpayments are generally the result of confusion. To be more precise, enterprises do not check whether or not they are paying the right amount of tax throughout the fiscal year. The result is that they pay too much.

As a business owner, it is possible to reduce one’s expenditure by managing the taxes the right way. It is recommendable to have a specialised accountant do the taxes. A professional is able to identify and claim opportunities that offer tax rebates. What is more, they help the organisation comply with the law.

Seeking the guidance of a tax professional is paramount, especially in your endeavor to reduce error is in the best interest of the business.

Waste management

Using a cost-effective waste management solution

There are different ways businesses can save money. Until this point, that should be clear. What may not be so obvious is that some solutions are more effective than others.

A genius way in which small companies can reduce costs is implementing an adequate waste management solution, such as waste baler.

It is no secret that waste collection is a costly affair. So as to protect the landfills and the environment, it is required to make arrangements for the collection, treatment, and disposal of by-products. Balers compress waste into compact bales, so they are easier to handle and transport. This, in turn, leads to transport cost savings.

The fact of the matter is that waste balers can increase an enterprise’s revenue. Recycling companies reward businesses that provide uncontaminated raw materials.

Attention needs to be paid to the fact that there are two main types of balers: vertical and horizontal. Vertical balers feature a large cylinder at the top. Loading is realised manually. As for the bales, they need to be tied by hand before being loaded onto the machine. Horizontal balers, on the other hand, are short in size and they are a little bit wider. Raw materials are compressed from a side ram and auto-tie systems can be incorporated. Waste balers are aimed at companies that produce small amounts of unwanted or unusable material.

Other solutions worth mentioning are compactors. Unlike balers, they are capable of handling large volumes of trash. They too reduce the number of pick-ups.

iPad inventory
photo credit: bump / Flickr

Purchasing goods in large amounts

Small businesses do not use many supplies, which is the reason why purchasing goods in large amounts is not justifiable. They are completely unaware of the fact that buying in bulk helps save significant amounts of cash. Purchasing a large quantity of a specific commodity reduces the cost per unit. Additionally, one pays less for supplies and products in the long run.

It is important to take a close look at the various resources that the organisation consumes and see what buying options are available. The upfront cost is large, yet bulking purchases are cost-effective and it is important to not forget that.

When purchasing goods in large quantities, it is not necessary to worry about aspects like price inflation.

Save money for business success

Final considerations

When it comes to running a small business, extra cash turns out to be useful. Capital is required to pay salaries and honour suppliers. Equally important is to not forget about the fact that wealth promotes business growth.

Organisations that learn how to handle their taxes, buy in bulk, invest in waste balers, and reduce power consumption are in a better position to meet their goals. In other words, they can put aside cash. There is nothing more important than developing a saving habit. Entrepreneurs who refuse to understand this aspect will no doubt see their companies fail.