Top Ways to Save Money in Your Business

Top Ways to Save Money in Your Business

Keeping your business running should be an art, perhaps even an art which you could teach to your children.

You might want to consider some money saving ideas in your business.

  1. Major Purchases
  • Purchasing office supplies such as a printer or a fax machine
  • Purchasing computer equipment
  • Buying furniture
  • Purchasing Special Research and Development (R&D) equipment
  • Buying a phone system and network
  • Constructing a new building or expand existing building
  1. Smaller Purchases

Include all regular purchases in your annual budget and set aside an amount for these items. A new computer system might require you to set aside $150 per month, for example. Set up a regular transfer so that the amount set aside for checks and other purposes will automatically transfer to the next budgeted item when that one is received.

  1. There is No Have and No Use

It can be embarrassing to admit that purchasing items counter to your budget can be a bad habit. So if you need to, resist the temptation to make additional purchases beyond your allotted amount for the budgeted item. Remember, your budget must always be a primary concern when making purchases. Only purchasing what is needed will minimize your impact on your budget.

  1. Pay in Full
  • When purchasing intangible goods, like software, it is always best to ask if there is a money back guarantee in place.
  • Shop for size and weight vs. quality. Having size and weight with a higher level of quality will tend to result in a lower price. Shop only by US specifications.
  • Don’t carry credit or debit cards. Use cash solely for clothing, full payments or services or everyday purchases.
  1. Zero Debt / High Interest Rates

Always try to have no debt whatsoever. Make a purchase without using a credit card and pay the entire amount in cash at the time of the purchase. Treat the use of a credit card as a ANCELLED cost. The use of the credit card is to be paid off immediately. There are no delayed charges, no finance fees, no over limit fees and no late fees. If there are any fees for late payments or over limit, they are taken off your current balance which reduces your need to transfer or borrow. As you pay off a credit card, apply that excess amount to the balance on your next credit card or line of credit. Do not use this line of credit for additional purchases. It aggravates the burden of debt much more. Create a positive sense of balance and budget that portion of your income toward eliminating debt. You will be surprised at how soon you will begin to see good success.

  1. Involve Your Creditors

Most companies run into financial problems from time to time and in some cases the financing may not be up to snuff or the debt just may not be there, or it may be there but not enough to pay the purchases or expenses. If you have customers that have good payment records and excellent credit with their company, consider discussing lowering the interest rate, or total debt, or even creating a longer term loan payment. They may be willing to help, especially if the economy continues to struggle, or if they see that their business will not sustain the higher debt or higher interest even if they are self-sufficient.

While you may not be able to dictate what those payments should be, you can certainly lower and increase them however you like. The payment that you send is a small portion of the overall debt and can make a great difference in the long-term debt and interest payments. . . if you want it to last throughout the month, and you trust your creditors to be caught up soon.

  1. Avoid Too Much Debt

At the beginning of my business life I owed many, many dollars in debt. I had credit cards, bills, lines of credit, etc. I was lured into it not caring how I was going to pay the debts off, or how long it would take or if it would ever get paid. I did not take the time to read over the papers and contracts to ensure that I was aware and knew what I was purchasing. I did not read over or understand all of the terms. I found myself in trouble. I had a good-sized debt and did not know how to pay it back or on what payment terms. The debts were far out of my reach largely due to lack of education about borrowing and the impact it could have on my credit score. If I wanted to build credit, I had to start paying down my debts and explaining the situation to creditors. I did not get a loan until I had my debt paid down. I wish I could report that I paid of my debt early…how come those debts never get discharged from a bankruptcy?

Here I am almost 30 years later, still paying on an old, past due debt that I cannot seem to pay off…