- Personal Finance
8 Simple Ways to Save When You're in Business
Some Tips on How to Save while Running a Business
Being your own boss in your own business is never easy. You have to worry about everything - staffing, billing and collection, paying suppliers, recording, etc., etc. With the recession we are currently experiencing right now, it is very hard to ensure that you have enough money to pay for everything, let alone save in case hard times are still ahead.
I have been running my own small accounting firm for the past two years and I tell you, the hardest part (aside from ensuring that you provide quality service to clients) is to make sure that you can pay for everything while ensuring that you can still save for your business' future. Through a series of trial-and-error strategies, I have managed to look for ways to save in my business (not that I have substantial savings, I'm still a long way from that). Some of them are fairly easy, others involved making hard decisions, but all-in-all, they contributed to keep my small practice afloat.
Your budget can make or break your business. I'm not kidding on this. Try to make a monthly budget and follow it as much as you can. You can easily see where you are overspending (and even underspending). The budget will also enable you to analyze situations when you will need to make special purchases for your business (can your business afford it or can you still defer it to perhaps next month or year?). The best thing about the budget is that you can easily match your collections (projected or actual) to your expenses and immediately see if you can save anything for this month. Better yet, include your projected savings as part of your "expenses" in your budget so that it gets easier for you to put aside that amount every month.
Invest to Save
In 2008, I bought a dot matrix printer (still very much in use here in my country). The price? Around 7,000 pesos or about $140. This is more than 3 times the cost of an ordinary laser jet or inkjet printer but I soon realized I'm saving a lot more with this (more expensive) printer. How? In terms of the ink or the ribbon (for the dot matrix). A refill of the ribbon for the dot matrix is just around $2 to $4 while a new ink for the other printers is around $20 to $40! The ribbon refill will last for two months while the ink will just last for one month (or even less). In less than a year's time, I was able to recover the cost of the dot matrix printer and much more. Of course, I can't print professional looking documents using the dot matrix but believe me, I never for one second regretted buying that printer. It was well worth it in terms of savings.
Or how about converting your inkjet / laser jet printer so that you can have a refillable ink? I tried this with one of my laser jet printer. The cost is around $50 but the ink costs only $2 per color or $8 for 4 colors. The conversion was expensive yes, but with the savings from the refill, I can easily recover the conversion cost in two months' time. Not bad!
Recycle and Re-use
This is an office. We print official documents all the time, even more so when it's income tax filing season. By the end of that season, we have tons of used bond papers on top of our tables. Those bond papers we do not throw away. We use one side to print internal schedules or we cut them up and use them as note pads. Or we convert them into envelopes. Next year, when its income tax filing season again, whatever's left will be used to print the drafts of our clients' financial statements.
For our used envelopes (we get them all the time when the client sends us something or when we receive letters from outside), we recycle them and use them to carry around checks for payments or cash or even store notes in our drawers. I've seen some clients still using their brown envelopes even though the edges are already torn. Now that's really recycling.
Save on Communication Costs
I have a cell phone I use for my business. Just recently, I saw my bill. It was like $60 for one month! That's quite a lot of money here. I looked through my statement and found out that I was making land line calls and calls to other network (which is more expensive) which were responsible for the large amount of my bill. Since a roving /portable land line phone is fast becoming a trend here, I purchased one and bring it anywhere with me. If I need to call a client, I use it to call land line to land line.The call is free (if I use the cell phone, it will be like 6.50 pesos per minute). For the other networks, I bought a phone line for that other network and use it whenever I need to call the other network's phones. My one month's cost for this other network - around $3 (unlimited messages and 4 hours worth of call). Well worth it if I can save on that $60 per month phone bill.
Reduce Work Days
I've recently cut my work days for my people and told them to take the whole day of Saturday off (used to be a half day every Saturday). My reason? Save on electricity, on water, and on snacks for my people. To make up for the lost Saturday and to ensure that we still get our job done on time, my people are required to extend for one hour during weekdays (okay, the electricity bill may not go down, but the water bill and the cost of their snacks surely will).
Watch the Salaries
I don't mean that you will not give a raise during this time (in fact, a salary raise may really be necessary to get your output up). What I meant is make sure that you capture your employees' excess leaves so that you can deduct these leaves from their salaries (just make sure they're not overdoing those leaves). For latecomers, you can implement a penalty for being late and deduct this accordingly (saving and a dis-incentive in one).
My Other Hubs
- What Do You Do When You Discover Your Employee is Cheating on You
He’s acting strange. He doesn’t meet your stare. There are questions about his work. You dig deeper. What is wrong with your employee? Then you find out. Your employee is cheating on you and has committed...
- Why You Need to Learn Accounting (the Basics, That Is)
Good accounting is often obtained by hiring good accountants or CPAs and/or having well-placed accounting procedures and systems. Most businessman and company owners stop here, thinking that good CPAs and...
- 10 Ways to Earn Passive Income
What is Passive Income? Passive income is basically what you earn even without actively participating in the earning process. Based on a local financial guru in my country, passive income is the income that we...
- Registering Your Business in the Philippines
http://www.tourism.gov.ph/wow/watch_our_whales.aspWhy the Topic? Okay, so the topic may not be that usual and may not be for everybody. But well, I'm an accountant and part of my job is to help my clients put...
- 10 Ways to Ruin Your Employment Through Social Networking Sites
Perhaps the biggest thing that could ever happen in the Internet in this decade is the boom of Social Networking Sites. Suddenly it seems that everybody who's in the online world is in Facebook, Twitter,...
Pay Your Taxes on Time Everytime
Sounds simple but if things can get really hectic around the office, chances are you might forget to pay your taxes (I've come so close to forgetting to pay my taxes a couple of times in the past). Forgetting to pay your taxes on time is a surefire way to get interest, surcharges and penalties slapped on top of your basic taxes and these can really cost you money. For me, this is doubly embarrassing because I ran an accounting office (quite ironic, an accountant forgetting to pay her taxes). So to avoid the additional costs and to safeguard my reputation, I make sure I pay my taxes well ahead of the deadlines.
Involve Your People
This one is probably the best saving strategy for me. Informing my people of my cost-cutting measures got everyone on board. I've seen changes in the sense that they are more mindful of the need to save the business' hard-earned cash (sometimes I even have to push them to use the air-conditioner when it gets really hot here, that's how conscious they are in cost-cutting). If everybody contributes in her own way, saving money in this business will become easier and less of a burden for me.
Sometimes it's hard to balance the need to save with the need to provide good quality service to my clients. However, balance is what I need for I can't afford to let go of the latter to achieve the former. Here's hoping that this hub's readers were also able to pick up something from the tips I placed above. If you have more tips on saving, would love to hear them (and maybe incorporate them as part of my savings strategies). Have a good (saving) day everyone!