5 Ways to Cut Costs in Your Small Business
By Jasmine Glasheen
As a small business owner, you have to monitor your bottom line. Profitability is a must if you want to keep your business up and running, so it’s important to be strategic about your expenditures. Expense tracking isn’t just a task for underperforming retailers… even businesses that are raking it in need to have enough liquid capital to invest in unexpected opportunities, to scale as demand grows, and to cover any unforeseen expenses that arise. Knowledge is power when it comes to cutting business costs. So, let’s take a look at five of the best money-saving tactics for SMBs.
1. Outsource Data Entry to Experienced Professionals
Did you know that bad data cost U.S. businesses $3.1 trillion in 2016? Very few companies moonlight as data entry professionals and errors can happen when you try to squeeze in important tasks like data entry in between all of the other demands on your time––and errors are expensive when you’re running a SMB.
Whether you’re using sales data to make purchasing decisions, enter your weekly revenue, forecast future expenses, do your taxes, or track employee performance, you need accurate data to run your business effectively.
Outsourcing data entry helps you out on a few levels. First, you save time by not trying to do it all in-house. You also save money on clerical errors, such as: shrinkage, unidentified tax write-offs (only 15% of business owners claim they deduct all of their potential write-offs each year), order mix-ups, and more.
By outsourcing data entry to a contract worker or third-party provider, you’re also saving money that you would otherwise eventually wind up spending on hiring a full-time employee to complete the tasks––so you don’t have to waste time second-guessing your math and can instead focus on running a successful small business.
2. Get Your Inventory on a Barcode System, Already
This is never a popular option. And that’s because business owners often equate streamlining their back-of-house operation with investing in expensive inventory management technology.
But getting your inventory on a simple barcode tracking system is way more cost-effective than you’ve probably been led to believe: A simple barcode label printer will run you about $90 on Amazon, and a subscription to a basic, barcode-based inventory management system starts at about $60 a month. Once you have over 200 units of inventory, it’s advisable to switch to a basic barcode tracking system so you don’t lose valuable stock running your business.
Considering that barcodes almost completely eliminate the risk of human error in the order picking, tracking, and delivery process, it’s well worth the small subscription fee––especially as your business begins to scale. Most inventory management providers will let you start with their cheapest option and add to your subscription as your business grows, so you’ll only pay for the processing capacity you need to track and manage your inventory. You’ll easily make up the cost with prompter, more accurate inventory location…and with all of the inventory you don’t lose to shrinkage in the process.
3. Give Your Employees Marketing Duties
Few businesses can afford to have full-time social media personnel on the sales floor. But by empowering your sales associates to create and share social media content, you can reap the benefits of a full-time social media expert with none of the cost. Training your employees to create social media content for your stores can also help to increase (that ever-elusive) employee engagement, since it gives them a personal stake in your business’s success and they’re gaining skills that they can add to their resume.
Don’t take this to mean that you should arm your employees with cell phones and send them out on your sales floor willy-nilly. In a recent Pew report, a whopping 63% of workers said that their employers have no rules about how they portray themselves on social media. But if your employees are using social media to promote your brand, you want to be sure that they are representing your store in the best light possible. Do this by training all of the employees with access to your store’s SM profiles on the dos and don’ts of posting as your company, and make sure that you have final approval on all of your employee’s posts before they go up on your pages.
4. Use Customer Data to Your Advantage
Collecting and utilizing customer data is no longer something just the domain of big box stores. An increasing number of SMBs are use customer data to improve their sourcing decisions, enrich their marketing campaigns, and increase their average transaction value. Relying on data to make business decisions increases your chance of success by 79%. But compiling customer data doesn’t have to be an expensive or complicated proposition. In fact, it has never been easier to put customer data to work for your business.
Two of the simplest ways to gather customer data are: 1) Through your POS system, or 2) Through online surveys. Many POS systems have the ability to track and monitor your customers’ purchasing behavior, and some even have the capability to funnel customer data directly into your CRM campaign. But if you don’t have an intelligent POS system, or your POS system doesn’t give you all of the data you need, consider gathering data through a free online survey site, such as Survey Monkey. Online surveys are one of the most cost-effective ways to gather and utilize customer data, so you can save money by sourcing the goods that will sell in your stores.
5. Lower the Cost of Credit Card Processing
Credit card processing is one of the most significant expenses you face as a small business owner. You want to be sure that you aren’t paying hidden fees on the backend, so it’s important to review your credit card processing statements to ensure that you know exactly how credit card processing works and what you’re paying for. Be sure to reach out to your merchant services provider with any questions that you have about your statement. And, if you suspect that your merchant services provider isn’t being completely honest about what you’re being charged, don’t be afraid to shop around for a more trustworthy provider.
Payment Depot uses a membership-based pricing model that’s completely transparent, so you always know what and why you’re being charged. Payment Depot is often called “The Costco of credit card processing” because they charge a wholesale credit card processing rate that’s similar to the wholesale model that Costco uses on home products––which explains why Payment Depot customers save an average of $400 a month on credit card processing. Click here to speak with one of Payment Depot’s award-winning, in-house customer service reps today.