22 Ways to Save Money in Your Business

Today, I want to share 22 of my favorite ways to save money in your business.

When it comes to owning a business, your number one goal is to make a profit. There are two ways to do this: increase sales and/or decrease expenses.

While your major focus should always be on increasing your sales revenue, you should also spend some time and look for ways to stretch the money that you do have.

Top 22 Ways to Save Money in Your Business

What you will see below are my best tips and tricks. I have learned these things mostly through trial and error during the past 17-years. They are listed in no particular order.

# 1 Run Your Business From Home

If possible, run your business out of your own home. This will save you a lot of money in rent and utilities, plus you will be able to take advantage of the home office deduction. Here are some of additional benefits:

Less financial risk: Buying a building or signing a long-term lease for a traditional business is very expensive, scary and risky. When you start a business from home, you are not accruing any additional “rent” expenses. This saves you a TON of money.

More personal freedom: Depending on what you do, when you work from home you save yourself time from commuting. You don’t have to have set business hours. You can wear what you want and you have more flexibility.

Improved work/life balance: Working from home will give you a better quality of life. Plus, you can involve your family and always be home for dinner.

Better productivity: This might not apply to everyone, but I know I am much more productive working from home than working somewhere else. Why? Because I love my work environment. I feel comfortable and relaxed.

Reduction in overhead expenses: Working from home lets you keep your operating expenses at a bare bones’ minimum, which helps you save money in your business, reduce your financial risk and increase the likelihood of you being profitable.

The worst thing we can do is get a second job. The best thing we can do is start a home-based business ~ Dave Ramsey

ways to save money in your business

# 2 Negotiate & Barter

In trade, barter is a system of exchange where participants in a transaction directly exchange goods or services for other goods or services without using a medium of exchange, such as money. Source

When you are purchasing things for your business, always try to negotiate or a better price. Ask if there is a veteran’s discount, a loyal shopper discount, a small business discount or whatever else might apply to your unique situation. Most prices are flexible. Besides, the worst thing you will hear is the word NO.

Also, if you are low on money, you could barter your services for the goods or services you do need. For example, a plumber might barter ten hours of their time  to install a new bathroom at a SEO company, in exchange for the company building them a website and helping them with SEO.

# 3 Defer Payments/ Time your payments

One of the most important aspects of your business finances is managing your cash flow properly. By all means, pay your bills on time, but make sure you delay your payment as much as possible. Pay them by the due date, but not two or three weeks early. That way you have more cash in your bank account that you can leverage.

# 4 Don’t Hire Full-Time Employees

Employees are your worst nightmare. In many cases, they will lie to you, steal to you, and run your bank account empty. Plus, full-time employees come with COSTLY expenses. You will be much better off hiring part-time employees, or even better, independent contractors. You can also hire interns.

# 5 Outsource Non-Essential Functions

As a CEO, your time is valuable. Do not spend your $100 per hour time doing $10 per hour tasks. Learn how to delegate or outsource. Determine which tasks are most important (sales and getting customers) and hire other people to help you do everything else.

Do what you do best and outsource the rest. ~ Peter Duncan

# 6 Maximize Your Tax Deductions

Take some time and sit down with your bookkeeper or CPA and educate yourself on what you can and can’t deduct. You’ll probably have to pay for an hour or two of their time. Trust me, this is money well spent.

Never try to cheat the system, but always take EVERY legal tax deduction that you can. Not taking your deductions is like throwing away money for no good reason.

# 7 Have Trusted Advisors

Every small business needs a few trusted advisors. At a minimum, you want a good real estate agent, lawyer, insurance agent and CPA. You want these folks on speed dial and you want a good relationship with them. Any money you spend on them is tax deductible and is money well spent. This is one area you do not want to be cheap with.

# 8 Evaluate Each Business Expense Once Every 90-Days

Once a quarter, take a few hours and go somewhere quiet. Look at all of your business expenses for the past 90-days. Evaluate each expense. Do you really need it? Are there cheaper or better options? Are you being over-billed? Is there any way you can save money with that expense or eliminate it? Chances are you will find at least 2-3 expenses you can eliminate, or at least find a cheaper and better alternative.

# 9 Take Care of Your Customers

One of the best ways to save money in your business is to take care of your customers. Your customers are your greatest source of referrals. Treat your customers like gold. Stay in touch often. Have a good up-sell and cross-sell program. Have a loyalty rewards program and a referrals program. This can save (and make you) a lot of money.

If you don’t take care of your customers, your competitor will. ~ Bill Hooey

# 10 Form Strategic Alliances

Another great way to save money in your business is to form strategic alliances. This is when you team up with other local business owners and collaborate. You share customers and referrals with each other. You do business with each other. You barter and exchange services.

I’ll tell you this: when two or three entrepreneurs work together toward a common good, they can accomplish great things.

Seek out strategic alliances; they are essential to growth and provide resistance to bigger competition. ~ Sir Richard Branson

# 11 Lease a Copier

This is one of the best ways to save money in your business. For example, my wife and I have an eBay business. We print a lot of shipping labels each month. We were spending several hundred dollars per month on inkjet cartridges for our printer.

We shopped around and leased a printer for $113.55 per month. It comes with free ink for life. Plus, it is a LASER printer and prints a much better quality document. Talk about a win-win situation.

ben franklin quotes

# 12 Buy Second Hand Equipment

You don’t have to buy everything brand new. Before you make any new purchase for your business, ask yourself if you can buy it second hand somewhere else for just a fraction of the price. It might not look “as good” as something brand new, but your checkbook will thank you for it.

# 13 Go Virtual

A virtual business employs electronic means to transact business as opposed to a traditional brick and mortar business that relies on face-to-face transactions with physical documents and physical currency or credit. Source

Go virtual. Have a virtual office. Have virtual employees or assistants. Put things on the cloud. Instead of owning your own computer servers, use a cloud based service. The more things you can do virtually, the better.

# 14 Deduct Your Mileage Expenses

Keep track of your business mileage is one of the fastest ways to save money in your business. Buy a mileage log. Before you drive anywhere, update your mileage log. Keep track of all of your business mileage. This one thing alone can save you thousands of dollars in taxes each year.

The Internal Revenue Service (IRS) released Notice 2019-02 providing the 2019 standard mileage rates. Beginning January 1, 2019, the standard mileage rates for the use of a car (vans, pickups or panel trucks) will be: 58 cents per mile for business miles driven, up from 54.5 cents for 2018. Source: IRS website

What does this mean? It means that if you have 20,000 business miles in one year, you would be able to legally deduct $11,600 from your taxable income. That is HUGE.

# 15 Fire Your Bad Customers

Not all customers are created equal. You should fire your bad customers as quickly as possible, and focus your time and efforts on finding more good customers. Why? Bad customers take your time, crush your profits and just make life miserable.

# 16 Work Less

If you learn to work smart, you can make more money per hour by working less. Make sure you take vacations each year. Spend time with your family. Pursue your hobbies. Why? Because if you lose your health, get divorced or end up hating life, you will lose most of the money your business has earned.

# 17 Max Out Your Retirement Accounts

Set up a SEP IRA for yourself and be sure to max out your retirement accounts each year. This will help minimize your taxable income and save you money! As an entrepreneur, you are allowed to invest more money in your retirement account each year than employees are. Take advantage of it!

The SEP IRA Limit Is Increasing in 2019. For those with money to spare, the SEP IRA contribution limit is increasing by $1,000 in 2019, from $55,000 to $56,000. SEP IRAs are traditional retirement accounts for small business owners and employees, including self-employed freelancers. Source

# 18 Pay Off Your Business Debt

Some people would argue that some types of debt are good. I personally don’t think so. If possible, stay out of debt or get out of debt as quickly as possible, so you don’t get stuck paying a bunch of interest or fees. Being debt free is something every business owner should strive for, if at all possible.

# 19 Get Organized

I probably should have made this tip # 1. You need to be organized. No, not everything needs to be dress-right-dress, color coded, or sorted alphabetically, but you do need to keep your business paperwork organized. Have some type of filing system for your taxes, receipts, invoices, etc. If you’re not naturally an organized person, hire someone for a few hours to help you get set up.

# 20 Buy Goods in Bulk

In certain cases, buying items in bulk can be a smart move. Make a list of all of the things you buy for your business and figure out how often you buy them. If it’s something you buy frequently, consider making bulk purchases so you can save money in your business! You might even want to get a Sam’s Club or Costco membership.

# 21 Do Not Offer Credit

Credit can be a good thing. In some businesses, you need to give your customers credit, because they are making large purchases. Whenever possible, try to avoid giving credit to your customer. You do not want to have an accounts receivable. Why? Because not all vendors will pay you. You could be stuck out to dry for the money, even though you delivered the goods on time and to standard.

warren buffet quote

# 22 Reinvest Your Profits

When you reinvest your profits back into your business, you do not pay taxes on it, as long as you are spending the money on tax deductible items.

Think of your business like a newborn baby. In the beginning, it needs a lot of love and attention. You need to nurture it, love it and protect it. As it grows, it becomes more independent, and needs you even less.

Whatever you do, do not make the mistake of sucking out all of your business profits for yourself. Reinvest that money back into your business, so you can grow it.

Profits are better than wages. ~ Jim Rohn

Final Thoughts

In review, these are 22 of my favorite ways to save money in your business. None of this is rocket science, but if you do the best you can to manage the money your business does have, you can make your business even more profitable.

What are your thoughts? What are your best tips on how to save money in your business? What do you do and recommend? Leave a comment below to let me know what you think. I look forward to hearing from you.

Suggested Reading

  1. Internet Marketing Business Plan
  2. Make Money Online Selling Coffee
  3. How to Use Cheap Ugly Postcards

 

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18 thoughts on “22 Ways to Save Money in Your Business

  1. These are great tips. I never even considered that leasing a copier would be a viable option cause it never crossed my mind. 

    Also, I fully agree with tip # 16, because I have heard of many people who decided to shut down their business because it completely took over their lives, and they had no time left for their family or hobbies. 

    • Yes, owning a business can be very demanding, especially during the first few years. It’s definitely not for everyone. 

  2. Some of these I did not know of like leasing copiers and even hiring part-time employees over full-time ones. The most important thing out of all of these is to invest your profits and learn to only do necessary expenses, saving when you can. Which one of these is the most noteworthy to you and how has it helped you?

    • I think the most important thing is to:

      1. Focus on growing your revenue

      2. Evaluate your expenses once every 90 days

      3. Track your business progress on a Profit & Loss statement once per month.

      I hope that helps. 

  3. Wow, I’m so glad to read this recent post on different ways of saving money in your business. Truth is that I actually do a full-time job along with my website business. And, I heard you saying that our website is our full-time job. But for earning purposes, I have to keep doing my day job for a couple of more months probably. 

    When it comes to saving money, I’m a dedicated student of T. Harv Eker and I totally follow his system of money management. Once I start earning revenue from my website, this post will make much more sense to me. And, I do agree that having full-time employees cannot give us freedom. But, do you suggest to hire 2-3 employees for video editing or content creation?

    As always, it’s my pleasure to read your useful posts. They are full of Golden nuggets. 

    • Thanks for the comment. I would hire independent contractors, never employees. With all of the available people online, finding people to do side gigs, without needing to pay employee type benefits, is very easy to do. 

  4. This is a great read for anyone just starting a business. When you own a business, you have to be really wise with your money, especially during the first few years when money is tight. Evaluating your expenses every few months and following all the tips you mentioned in this article you will definitely put you on the right track. Thanks for the information, Chuck. 

    • Glad to be of help. All businesses should be smart with their money!

  5. This is a very well written article. I like the quotes that are in the post. I really like number 16. It is true if you don’t take care of yourself you won’t be here or be able to enjoy it. I also like number 15. It is a good thing to get rid of pain in the butt customers. They can really be a hassle and give you a lot of stress. I will keep these tips in mind for myself. Overall, great article!

    • Glad to help, Ron. Yes, getting rid of your bad customers is a wise move. The reduced stress and hassle gives you more time to focus on finding more GOOD customers. 

  6. I could spend an hour going through all the things you covered in this article!  These are specific, important aspects of running a business economically.  People get caught up in thinking they have to have the top product in their business to be successful, but that just is not true at all.  I know there are a lot of shiny objects, no matter what line of buisness your’re in.  I run an online business, and I feel like there is always some program or tool I’d like to buy for my business.  Thanks for helping every business owner, even if they only apply one or two of the suggestions, they’ve saved a lot of money!

    • Glad I could be of help. I agree, having the top product is not necessary to succeed in business. You must have a GOOD product or service, but more importantly, you must know how to PROMOTE it AND you must be a good steward of your business finances. Just my two cents. 

  7. Thanks for the great article Chuck!

    These 22 tips for saving money are so very helpful, especially for someone just starting out with their online marketing business. You offer ways of saving I never would have thought of, such as leasing a printer for example. I can say from personal experience my little home printer is being stretched to its limits by being transformed into a business printer.

    The addition of the quotes by well known and successful entrepreneurs adds an extra dose of credibility to your article. I love good motivational quotes.

    Having your “about me” as a sidebar is a nice idea, and I may just use that as a 23rd tip!

    Thanks for this useful information, I appreciate learning from people like you who know what it takes to become successful.

    KyleAnn

    • I’m glad I could be of help. One of the best ways I have saved money in my small business is from leasing the printer. My only regret is not doing it sooner.

  8. I think the clear-cut best way to save money was your number one recommendation: Work from home. That, and going virtual. So many businesses cost so much to start up but by sticking to a home office, it clears out hundreds if not thousands of dollars in monthly rent, so I agree wholeheartedly with you there. I like some of the other recommendations, such as reinvesting, one that I’m not sure too many people are willing to do, but it is a rewarding endeavor. 

    • Yes, working from home is one of the smartest business moves. I know many people with traditional businesses and their start up and ongoing costs are very, very high. It makes it next to impossible to make a profit. Working from home is great. I wouldn’t have it any other way.

  9. This is a great article, Chuck. I’m going to go through each one of these categories and look for ways I can save money in my own business. I like the idea of doing a monthly profit and loss statement to know where your business stands financially each month. If you don’t stay organized, and you wait until tax time to do this, it can be a stressful nightmare!

    • Yes, Jade. You definitely want to do a monthly P&L so you know your income, expenses, profit and/or loss each month. This will keep you on track and help you identify areas you can improve upon and expenses you can eliminate or reduce. 

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