Ways for Small Businesses to Cut Costs

Operating a small business costs money. There’s no way around it. But before you throw your hands into the air in frustration, let’s talk about some ways you can cut costs.

Time management is an easy way to save money

If you can manage your calendar efficiently, you will save money. Some vendors offer a discount for paying bills within a shorter time window. If you ever see this on a bill (2% n15) it means you will get a 2% discount if you pay within 15 days.

Likewise, if you ship packages ahead of schedule, you can avoid paying double or triple (or more!) to expedite delivery. This sounds easy, but sometimes things happen, and it is the only solution. Just do what you can to avoid it.

Don’t accept contracts without negotiating

I worked as a logistics coordinator for a company with a chain of stores. Our shipping costs were extreme. Each time we met with UPS, we asked for better rates with little improvement. Eventually we put together a formal RFP document (Request for Proposal) with our estimated shipping volume and forecasted growth. UPS offered a much more substantial discount than they initially claimed. So don’t give up and don’t feel bad or nervous asking for discounts. They expect you to do this! (They also respond if you tell them you will switch carriers if they don’t comply.)

This works for other companies as well like banks and credit card companies. They may say no, but you will be shocked at how often they say yes to giving a discount or removing a fee by just asking.

Telling your suppliers that you’re price shopping will make them rethink your rates and likely offer a price break of some kind.

Consolidate your suppliers whenever possible

Most small businesses need supplies like toilet tissue, coffee for the break room, or packing tape. It may be convenient to just purchase these things as needed from the local store or Amazon. While this is sometimes easier, it’s usually not cost effective.

There are sources that offer a wide selection of office and warehouse related products. ULINE is a very common one. I recommend opening an account with ULINE or a similar company and purchasing your supplies in bulk. Do not take out extra storage for this. (Stay away from a storage unit if you can!) But remember that bulk pricing will always be more favorable.

Consider cost-saving programs

Cost savings companies help you save on things like shipping and only take a percentage of what they save for you. It’s a good idea to track things like this but often you don’t have the labor resources. If it seems like a reputable company and you have heard testimonies from their customers, it can be worth trying these out. 

While there are a variety of reputable savings companies out there, Savings4members is unique in the industry. Instead of representing individual businesses, Savings4Members takes scale one step further

By partnering with membership organizations and alliances to offer member-businesses the cost (and time savings) that can make a difference. If you’re a member of one of these organizations or have already started working with a cost savings provider it can certainly help.

Looking for ways to boost your cashflow?