It is not easy to run a small business. People who run a small business don’t have a lot of money to spare, and they try to keep wasteful expenditure to a minimum. Even after all the efforts, there are always some areas where money can be saved. For a small business, every penny counts. The following are a few areas where money can be saved in a small business.
• Energy Saving Fixtures – Most small business office places get incandescent bulbs installed in the building to save initial money on expenditure. However, these bulbs cost a lot in the long run because they escalate electricity bills and also lead to wastage of energy. Instead, offices should get energy saving bulbs and lights, which would last 10 times longer and would also lower the electricity and energy bills.
• Leasing Equipment – Instead of outright purchase of equipment, leasing should be preferred. By leasing, the entire cost of the equipment can be spread over the years and a proper comparative analysis with buying should be performed. Usually, leasing seems to cost more when calculated without taking time value of money into account. However, it reduces the risk of the small business and saves the hassles of an outright purchase.
The small business owner does not have to worry about repairs to the equipment since the leasing company would take care of that. Also, they would be saved from loans as annual lease payments could be easily financed as compared to loan installments. It is prudent to choose between getting a loan and going for leasing using financial analysis techniques.
• Used Or Refurbished Furniture and Equipment – Second hand furniture and equipment is easily available as there are many business organizations going out of business. These business units sell their furniture and equipment at a really low price and an eye should be kept out for such deals. It is important that the technician does a proper analysis of the refurbished or second hand items before a purchase is made. This is especially true for equipment because no one wants to end up paying anything for equipment that would not work.
• Negotiation – Negotiation is always a great tool on which a lot of money can be saved. It should be used prudently with lenders. The best way to do this is to always ask for quotations from various suppliers and vendors and use the figures during negotiations. The vendor or supplier offering the best price should be chosen. Prices can also be discussed if a choice vendor is not lowering their prices as it could act as a motivator for a better price.
• Free Services or Service Barter – Many small scale business units barter their services with each other to save money. It can be a nice tool to save money and improve business relations as well.
It should always be remembered that money cannot be saved by sacrificing the quality of services and that should be an important consideration when money saving tips are used by small businesses.