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different sources of finance for businesses
7 min read

10 Clever Ways to Save Money in 2024

As the new year unfolds, small business owners find themselves at the crossroads of financial decision-making, seeking ways to trim expenditures without compromising operational efficiency. In this blog, we will explore ten targeted ways you can save money, allocate resources wisely, and fortify your financial foundations for sustained growth and success.

1. Consolidate suppliers and negotiate bulk deals

One of the fundamental steps in cost optimisation involves streamlining the procurement process. By consolidating suppliers and negotiating bulk deals, small business owners can create a more stable financial environment.

  • Supplier consolidation: Identify areas where suppliers can be consolidated without compromising quality or service. For example, evaluate if various office supplies, such as stationery, printer consumables, and cleaning supplies, can be sourced from a single supplier without compromising quality. Or, if your business utilises multiple IT services or software solutions, explore the possibility of consolidating them under a comprehensive IT service provider.
  • Negotiate bulk deals: Engage in negotiations for bulk purchases or long-term contracts with reliable suppliers to secure cost savings. For example. negotiating long-term contracts with service providers, such as cleaning services, IT support, or marketing agencies. This not only secures cost savings but also establishes a stable partnership.

2. Monetise surplus assets through reselling

Unlocking hidden value within your business can come from identifying surplus assets and transforming them into liquid assets. This not only helps in generating cash but also aids in decluttering and optimising space.

  • Inventory audit: Conduct a thorough audit to identify surplus assets, ranging from outdated office equipment to excess inventory. Identify slow-moving or excess inventory that may be taking up valuable shelf space.
  • Online reselling platforms: Utilise online platforms or industry-specific channels to resell idle assets, converting them into cash for reinvestment. As well as the likes of eBay and Facebook Marketplace, explore industry-specific online marketplaces where businesses within your sector buy and sell equipment. These platforms may provide a targeted audience interested in your surplus assets.

3. Embrace equipment leasing over purchasing

Enhancing financial flexibility is crucial for small businesses. Opting for equipment leasing instead of outright purchasing allows for access to necessary resources without the burden of hefty upfront expenses. There’s also the matter of asset depreciation…

  • Depreciation calculation: Assess the anticipated depreciation of existing equipment. If the depreciation curve suggests that the equipment’s value is diminishing rapidly, it might be more cost-effective to explore leasing newer, more efficient assets.
  • Tax implications: Depending on tax regulations, the depreciation of assets can have an impact on the business’s taxable income. Leasing, in some cases, may offer more favorable tax treatment.
  • Lifecycle analysis: Conduct a comprehensive lifecycle analysis of the equipment. This involves evaluating the total cost of ownership, including maintenance and operating costs, over the lifespan of the equipment. Leasing may present advantages if it aligns with the equipment’s lifecycle.

4. Use expense cards to monitor expenditure in real-time

Maintaining a hands-on approach to managing day-to-day expenses can contribute to better financial control. Many businesses now choose the cash-free route, preferring carry out and monitor spending using expense cards. 

  • Convenience: Digital transactions and expense cards offer convenience and efficiency, reducing the need for handling and counting physical cash.
  • Automated tracking: Many digital payment methods provide automated tracking and reporting, streamlining the record-keeping process.
  • Security: Digital payments often come with enhanced security features, reducing the risk of loss or theft.

5. Review and trim unnecessary subscriptions

The modern business environment is inundated with various subscription services. Regularly evaluating and eliminating unnecessary subscriptions can result in significant cost savings. Here’s a couple of examples for different types of business services. 

  • Marketing agency: Uses various software tools for analytics, project management, and graphic design. Conducts a subscription audit reveals that two similar tools serve the same purpose, and consolidating to one subscription can lead to cost savings.
  • Consulting firm: Subscribes to several industry publications for market insights. Through the audit, it discovers that the team rarely refers to some of these publications. Canceling the less-relevant subscriptions can lead to savings without compromising knowledge.

6. Implement cost-effective transportation measures

Transportation costs can be a significant expenditure for businesses. Exploring opportunities to minimise these costs through consolidation and alternative transportation methods can contribute to overall savings.

  • Consolidate deliveries: For example, a restaurant sources ingredients from multiple suppliers. By consolidating orders and coordinating deliveries on specific days, the restaurant reduces the frequency of deliveries. This not only streamlines the supply chain but also decreases transportation costs.
  • Alternative transportation: Consider alternative transportation options such as carpooling and cycling and encourage remote work to cut commuting costs.

7. Promote efficient energy consumption

In the face of escalating energy prices, businesses are grappling with the challenge of managing substantial energy costs that significantly impact operational expenses. It becomes imperative to proactively address this financial strain by conducting a thorough energy audit and embracing energy-efficient practices. The goal is not only to curtail immediate expenses but also to establish a foundation for sustained, long-term cost savings.

  • Energy audit: Assess your business premises for energy efficiency and identify areas of waste. For example, a manufacturing facility undergoing an energy audit discovers that outdated machinery is consuming disproportionate amounts of electricity. By addressing this inefficiency, the business can significantly reduce energy costs
  • Implement efficiency measures: Adopt simple measures, such as turning off equipment when not in use or upgrading to energy-efficient appliances. for example, A corporate office, facing the challenge of rising energy costs, implements a policy encouraging employees to power down computers and turn off lights at the end of the workday. This straightforward measure contributes to lowered electricity consumption and, consequently, reduced expenses.

8. Negotiate insurance premiums and policies

Regularly reviewing insurance policies and engaging with providers can result in more favorable premiums. This not only ensures adequate coverage but also optimises costs without compromising protection.

  • Policy review: As industries transform and businesses expand, policies should be scrutinised to guarantee alignment with current needs and potential risks. For example, a technology company, after launching new products and expanding its market reach, conducts a comprehensive review of its insurance policies. This reveals gaps in coverage that emerged due to recent developments, prompting adjustments to ensure comprehensive protection.
  • Negotiation: Engage with insurance providers to negotiate more favorable premiums based on your business’s risk profile.

9. Explore high-interest business savings accounts

Maximising the growth potential of your business savings is a proactive financial management strategy. Placing cash reserves in high-interest business savings accounts allows for passive growth.

  • Savings account assessment: Evaluate the interest rates offered by different business savings accounts.
  • Proactive fund management: Place cash reserves in accounts with favorable interest rates to maximize returns on idle funds.

10. Conduct a comprehensive expense audit

A meticulous examination of all business expenses can reveal areas for optimization. Categorizing expenses into essential and non-essential, and identifying opportunities to trim costs, fosters a leaner and more efficient business model.

  • Expense categorisation: Classify expenses into essential and non-essential categories. For example, a retail business classifies operational supplies into essential items like inventory and packaging materials versus non-essential items such as decorative office supplies. This categorisation aids in streamlining procurement decisions for cost-effective operations.
  • Trimming opportunities: Identify areas where costs can be trimmed without compromising productivity or quality. For example, a manufacturing company identifies opportunities to trim utility costs without affecting production efficiency. This may involve implementing energy-efficient practices, investing in eco-friendly technologies, or negotiating more favorable utility contracts.
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Olivia Wood, business content writer

Olivia Wood is a writer with hands-on experience in business success. Having made the leap into the world of freelancing, she offers her expertise to help others.

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