Most of the money conversation you’ll have around your business is centered around how to make more of it. How do we increase our sales? How can we up our revenue? What can we do to be more profitable? And as much as those are important questions (maybe even more important answers), there is another way you can end up with more money in your bank account—you can save!
We know saving money can be hard to do on your own (let alone for your business) so we wanted to share 6 money saving tips with you. Read on to see what they are and get tips about how to put them into action so you can run a more profitable business!
Open a business savings account
Opening a business savings account might seem like a “duh” moment, but you might be surprised to learn this is a step a lot of businesses skip! And as simple as it may be, having another account allows you to keep your funds separate from the accounts you’re spending from—which makes it easier for you to manage your spending and protect your savings. Because (let’s be honest), it’s way too easy to spend an extra few hundred here and there when it isn’t set aside.
The other reason this is a good idea is many banks offer special rates or bonuses if you open a business savings account with them, giving you the chance to make more money just for saving!
Pay off any existing debt
This is a big one. Being in debt (whether it’s credit cards, business loans, etc.) can be a heavy burden to carry long-term, and it’s really hard to save money when you’re paying off those bills every month. Paying off any existing debt will help you free up cash that can be used for other things—or saved!
But paying off your debt is about more than just freeing up cash, getting out of debt means you can avoid paying interest on them, which saves quite a bit of money in the long run. It might seem like a daunting task but setting up payment strategies that work within your budget can help get it done! You’d be surprised at how quickly you can pay off an existing debt when you have a plan to do it.
Hire a CPA
Speaking of financial strategies, hiring a CPA (certified public accountant) is a way to spend money to save money. CPAs can help you from both a business and personal financial standpoint. They are trained to provide guidance on taxes, investments, financial planning, and more—all of which could save you money in the long run.
CPAs can also provide advice (or strategies) for budgeting, filing your taxes correctly, developing payment plans for any debt, and more. If you’re looking for ways to save, having a CPA on your team is one of the best investments you can make.
Get a business credit card (with rewards)
We know we just talked about paying off your debt, but getting a business credit card with rewards or that earns points is a way you can save money for your business. The biggest perk of having one of these cards is the ability to earn rewards—some of which you might be able to use to pay down existing debt, pay for travel or even just have as a rainy-day fund.
Business credit cards also usually come with additional perks, like sign-on bonuses and cash back bonuses Just just make sure to pay off your balance in full every month!
Evaluate your COGS (cost of goods sold)
When you’re trying to save money, it’s smart to figure out where you are overspending—and your COGS is a great place to look first. Whether you are a service-based business or one selling products, it costs something for you to produce that product or service…the question is how much?
Are you spending too much on supplies? Do you need to find a cheaper vendor or find ways to use the existing materials more efficiently? Are you charging enough for your product/service, and could you be saving money by cutting back overhead costs in other areas (like labor costs or shipping fees)? Evaluating your COGS helps you figure out the answers to these questions — which hopefully puts you in a better place to save.
Pro-tip: Learn more about profit margin here!
Manage employee spending
Managing employee spending is a great way to save money for your business. This includes things like monitoring their travel expenses, reimbursing them correctly and on time, and making sure they aren’t overspending on company credit cards, or buying unnecessary items with company funds.
Knowing what your employees are purchasing and how much it costs can help you see where you can save. It’s also important to have rules and guidelines around employee spending, so everyone is on the same page and knows what’s allowed (and what isn’t). This helps your employees stay within budget and keeps company funds from being wasted.
Use technology
Many businesses are turning to technology as a way to save money—and they’re finding out that it can be quite beneficial. Because using technology means you can cut back certain overhead costs that are expensive to “scale”—where technology doesn’t necessarily increase your costs as you use it more.
Pro-tip: Rock Paper Coin is one of the technologies that can help save you money! Start your free trial today!
By being mindful of how you’re spending money in all areas of business, you can keep costs low and save money in the long run. Taking control of your financial decisions, hiring a CPA, getting a business credit card with rewards, evaluating your COGS, and managing employee spending are all great ways to help you save money and run a more profitable business.
So let’s get started! How will you start saving money today?
