4 Simple Money Saving Ideas for Businesses
Whether you’re a startup up or an established company, finding places to save money is smart business.
Most companies run on razor thin margins, especially startups. Often the difference between being in the red comes down to a few seemingly small financial decisions. And maximizing margins is all about finding places where you could be leaner, more efficient, and leverage your resources more effectively.
Wondering how to save for a business? Here are four ways you can accomplish that:
- Perform a detailed review of your financials
- Find low-cost marketing channels
- Consider the type of company card you use
- Outsource where possible
#1 Track and Review All of Your Expenses (Including the Little Ones)
As a business owner, do you know how much money is flowing out of your company on a monthly, weekly, or even daily basis? Are you tracking business expenses in real-time or only looking back retroactively at the end of the month? Knowing how to cut business expenses is a lot easier when you know exactly how much you are spending and where.
To make an accurate budget (and discover cost savings along the way), you need to know everything about where your money is going in the first place. Only then can you determine whether those expenses are generating ROI. If they’re not, those funds should be cut and allocated elsewhere.
Small cuts to ongoing expenses can create significant savings over the long term. Those dollars add up, especially if they’re being wasted. Financial guru, David Finkel, suggests that you do your best to make expenses variable instead of fixed:
“You can change variable expenses when you need to, dialing them up or down to suit your cash flow situation and business needs. This flexibility is highly valuable. For example, could you use performance-based compensation versus guaranteed payments? Can you rent, not purchase?”
As you set your budget, look for areas to reduce waste. As the business owner, consider the inherent risks to your organization. For instance, a seasonal industry may require a budget that breaks down into quarterly periods, or even monthly.
#2 Find Low-Cost Marketing Channels
How are you getting the word out about your business? Improving your marketing efforts can bring the company money and new clients in the future.
Marketing is one of the primary ways you can generate more revenue, but it can also come with some of the largest price tags. It’s vital that you’re monitoring your marketing spend at all times and then measuring your return on that spend.
There are dozens of creative ways you can spread the news about your company without spending an arm and a leg. As Lori Cheek, CEO of Cheek’d, puts it:
“My number one marketing tip is ‘Don’t just think outside the box; Get rid of the box!’ Be creative. Think guerrilla. And if that doesn’t work, sometimes it just doesn’t hurt to ask. I’ve ended up on the news many times by just calling up the news channels and asking them if they’d be interested in featuring my business. It’s sometimes that simple.”
So, what are some marketing channels you should consider?
- Social media – Social media has become king of the marketing space—and for good reason. For minimal costs (or none at all) you can generate significant return on your investment by building organic buzz, starting conversations, and driving new customers down the sales funnel. The most important channels to focus on include Facebook, Twitter, and Instagram, as they have the biggest following. That said, be sure to consider your target demographic because Pinterest, TikTok, YouTube, or Twitch have dedicated, niche audiences.
- Inbound marketing – Many businesses have shifted their marketing budget away from traditional and internet advertising and instead focused on getting results via search engine optimization (SEO) and organic marketing. Whether it’s leveraging your website’s blog, building out a YouTube channel, or simply making sure that the content on each page is SEO friendly, there are dozens of ways you can boost your business on SERPs without spending a dime.
- Marketing via community building – Whether it’s leading webinars or hosting guest posts on your blog, community-building marketing is all about engaging and interacting with existing customers. By building and maintaining relationships with your audience—whether online or in-person—you can make them feel valued and more likely to remain loyal.
- Review marketing – You can set up business pages on review sites to help stir up buzz. By curating business pages on sites like Yelp, Nextdoor, and Google My Business, you can leverage existing users to offer word-of-mouth marketing through positive reviews.
#3 Consider the Type of Company Card You Use
The business card you use can have a significant impact on both your savings and expenses. This is particularly true if you have a corporate card that’s paired with a spend management platform. And in many cases, a charge card is preferable to a credit card.
Why is that?
Credit cards act as a loan that only requires a partial payment of the bill each month, with the remaining balance rolling over, plus interest. They tend to have credit limits that cap spending, require minimum payments, revolving balances, and set interest rates. Also, failure to repay your balance and incurring a large credit utilization ratio can result in damaged credit scores.
Corporate charge cards, on the other hand, require a full monthly payment on the outstanding balance. In exchange, they have high spending limits and no interest rates. Charge cards are perfect for businesses that have assured recurring revenue and are confident they can afford to repay their expenses.
So, what are the features you should be looking for in your corporate card?
- Cash back over rewards – If you have asked yourself, “How does cash back work?” you are not alone. Credit card rewards and points programs tend to be deceptive. But it’s hard to see that until you take the time to calculate their real cash value. On top of that, they often have reward spend periods or limit how and where the points can be redeemed. Cash back is the preferable option since you can get a quantifiable return on every dollar spent.
- Built-in accountability – Look for features like automated receipt matching and automated expense tracking to help you better manage your expenses and streamline the month’s end reconciliation process for your accountant.
- Real-time tracking and analysis of company financials – The better visibility you have over your business’ expenses, the wiser the business decisions you can make. It’s critical that you can monitor company expenses from both a macro as well as a micro perspective, zooming out over an entire department or zooming in on a single employee or expense.
- Automatic cost-savings and Control Center – Your card should work for you as a small business owner. If it’s a smart corporate card program like Ramp, it will be able to automatically identify cost-savings opportunities, such as dual SaaS subscriptions, missing cash back, or increased AWS spend.
#4 Outsource Where Possible
While this is largely dependent on your industry, there are likely a few areas of the company where having a full-time employee doesn’t make sense. One of our top budgeting tips for businesses is to outsource whenever possible.
Do you really need to hire a full-time graphic designer to help with smaller presentations? How about a writer for a few blog posts a month? Or even an internal IT department? Keeping someone on payroll when they’re not generating daily ROI doesn’t make financial sense, especially when you account for benefits and other related costs.
Specialization is the name of the game.
Sometimes, the best option available is to outsource the work to freelancers. But this doesn’t mean simply go for the cheapest option. You should instead select someone who will reliably produce high-quality work. That way the job only needs to be done once.
Harvard Business Review suggests that even administration can be outsourced:
“Considering the advancements in recent years by administrative service providers of all kinds, you may want to question whether your needs are really so specialized that you should ignore the potential benefits of outsourcing payroll, benefits management, recruiting, media planning, and other functions.”
As you continue to grow as a small business owner, work on establishing a network of specialists you can partner with to optimize your organization.
Saving Money Simply, with Ramp
Staying atop of your finances and finding places to save money isn’t always an easy, straightforward task. Often, there are difficult decisions and careful risk calculations that must be made along the way.
That said, to make your life simpler, start with these four money saving ideas for businesses:
- Track and review your expenses
- Find low-cost marketing channels
- Opt for a smart corporate card
- Outsource when you can
When it comes to finding the right card for your business, that’s where Ramp comes in.
The Ramp corporate card is a smart charge card with a built-in expense management platform. Whether it’s helping you via automated real-time accounting or providing an instant 1.5% cash back on every purchase, we have the card made for your business. It all comes down to the underlying philosophy: At Ramp our mission is to help you save money, not spend it.
Inc. 6 Tips to Manage Your Business's Expenses and Reduce Your Costs. https://www.inc.com/david-finkel/6-tips-to-manage-your-business-s-expenses-and-reduce-your-costs.html
Bplans. 30 Cost Cutting Tips for Small Businesses and Startups. https://articles.bplans.com/money-saving-tips-business/
Harvard Business Review. When You’ve Got to Cut Costs–Now. https://hbr.org/2010/05/when-youve-got-to-cut-costs-now