8 ways to stretch your money further
If you earn a living by making things, you are more than talented. You are, by definition, an entrepreneur, which means you probably keep your business humming along by doing more with less. Less manpower. Less capital. And a lot less wiggle room in your budget.
Wondering if there are other ways you can maximize your resources and save money? Here are 8 tips to help you stretch your small budget even further.
1. Track your spending. According to the U.S. Small Business Administration, about half of all small businesses fail during the first year in business. "One of the main reasons is the lack of cash management," says Tony Cioffi, Professor Emeritus of Business at Lorain County Community College in Ohio.
Whether you have a fledgling business or an established customer base, how well you manage your budget will determine the health of your venture.
"It's important to find a trustworthy accountant or financial adviser," explains Cioffi, who has more than 35 years of experience working with small-business owners. "Having somebody who can give you financial guidance will help position your business for success."
Seeing is believing when it comes to smart money management. Monitor your cash flow by recording every expense and payment into a budget-making template, such as those at www.budgettemplate.net.
2. Seek out small savings. It's not always realistic to uncover big cost-saving opportunities in your budget. But small savings can add up over time. Here are a few ways to find them:
- Purchase non-brand name products when possible.
- Check for price-match guarantees on frequently purchased items. Most major retailers offer them.
- Contact your local Chamber of Commerce or trade associations for a list of retailers that offer discounts to qualifying individuals and organizations.
- Learn the best time of the year to purchase items for maximum savings.
Also, never underestimate the money-saving power of coupons. Small Business Trends offers a virtual goldmine of coupons and discounts for entrepreneurs.
3. Nurture your vendor relationships. When you establish and maintain good vendor relationships, companies will be more likely to view you as a business partner and, as a result, more likely to accommodate your financial requests.
"Vendors who have a long-standing relationship with you are more likely to negotiate their prices," says Claudia Varos, a former online retailer and children's party planner.
Remember: Your vendors have a vested interest in the success of your business. So don't be afraid to bring up ideas to improve cost savings or efficiencies.
4. Go greener. Embracing a few simple, eco-conscious practices can help you reduce costs while shrinking your carbon footprint. Here are a few to try:
- Lower the thermostat temperature.
- Keep equipment updated and well-maintained.
- Use paperless invoicing to reduce waste.
- Recycle supplies instead of buying brand-new items.
5. Implement cloud computing. Storing inventory updates and other important data in "the cloud" – a remote network of servers – is both convenient and cost-effective. Most cloud service providers will charge monthly for only the storage you use. Because the servers are housed remotely, you'll save precious workspace and consume less power, which is good for the environment and your budget. Plus, you can work wherever there is an Internet connection.
Learn more about cloud computing here.
6. Be "supply savvy." The creativity you bring to your products can also come in handy when selecting supplies. Reuse leftover supplies whenever you can; if possible, purchase materials that can be used for multiple products. Doing so could lead to a bulk purchase, resulting in noticeable savings.
In addition, avoid buying supplies you already have, which is a waste of your hard-earned income. Create an inventory list and update it regularly to ensure you only purchase items you really need, recommends Jennifer Martin, owner of Zest Business Consulting.
7. Use low-cost marketing tools. Thanks to the Internet, it's easier than ever to market your business without breaking the bank. Just a few bucks a month is all it takes to host a website and blog where you can promote your business. Inexpensive web-hosting options include Wix, Moonfruit and Wordpress. Expand your marketing reach by creating free business profiles on dozens of social media sites, from Facebook to LinkedIn to Google+.
Even a modest investment in online marketing can pay big dividends.
8. Buy in bulk. Do you find yourself frequently running out for more materials and supplies? Buying in volume from a wholesale supplier could help you reduce your cost-per-item, making it less expensive to make your products. You'll generate a bigger profit – and gain the convenience of ordering items less often.
Key tips and takeaways
- Partnering with an accountant or financial adviser will help you track your cash flow and avoid overspending.
- Look for small savings that add up – whether it's choosing green products, buying items when they're on sale or making bulk purchases.
- Build strong vendor relationships. This will help you negotiate the best prices and uncover more cost-saving opportunities.
- Use cloud-based tools to store and manage important business data (inventory, budgets, sales, etc.). You'll save space – and make sure you only buy what you need.