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The first one to three years after starting your small business is a critical time for building a successful foundation. The last thing you want is to grow your debt instead of your earnings. Even breaking even in the first few years is something to be proud of, but it’s not always easy to navigate the finances when you’re busy with a thousand other important tasks. Here are effective money saving strategies that can help you grow your small business.
Explore Tax Credits and Incentives
One of the best ways to help your small business succeed is to manage your tax burden using credits and incentives. From employment and expansion incentives to deductions for electric vehicles and solar panels, there are a host of opportunities for you to explore. For example, the Employee Retention Credit is part of the Covid-19 Pandemic relief package introduced by the federal government and it could help you lower the amount of taxes you owe to the government by giving you a credit for keeping your staff employed in 2020 and 2021.
While you can fly solo and research all of the ways to save on your taxes by yourself, a more effective route is to ask a tax expert or consult your local small business association.
Take Advantage of a 0% APR Credit Card
When you own a business, there will be times when you need to use a credit card. For large purchases and balance transfers, you should try to take advantage of introductory credit card offers that give you a low or 0% APR for at least a year. This is the best way to utilize credit without getting overwhelmed by interest.
Ideally, your 0% APR credit card will also come with cashback benefits for frequent use. Always compare your options before settling on your company credit card so you can get the best benefits package.
Go Paperless as Much as Possible
From invoices to receipts and special offers, you can save money by going paperless. Fortunately, with today’s digital innovations for small businesses, just about every part of running your business can happen virtually. Don’t get stuck in a cycle of buying postage and envelopes that will inevitably be cast aside by your customers and clients. Instead, invest in high-quality software that automates these processes. Your customers and your bottom line will thank you.
Track Your Spending with Financial Software
Another way that technology can help you save money is through financial spending software. Accounting is one of those areas that you don’t want to waste time managing by hand. You’re more likely to make small errors if you’re building out your own spreadsheets. Plus, it will be difficult to automate and connect all of the services you use and your expenses if you are using a variety of different DIY solutions.
Whether you opt for a low to medium-budget financial software suite or you have the cash flow to spring for your ideal system, it will pay off in the long-run. You’ll get the ability to check your cash flow in real time, keep track of spending, and see what areas are hitting your bottom line the hardest, helping you know what to budget for in the future.
Track Down Vendor Discounts
If you’re settling for the base price from your vendors instead of asking for discounts, you may be missing out. From quantity discounts to early pay benefits, you have to investigate how to get the best deals you can from the vendors you use. It may take a lot of comparison shopping and bargaining, but you need to make vendors work for your business, not the other way around. If you never ask about how to get better rates and discounts, youl’ll never know what’s available.
Streamline Your Company Travel Policies
Business travel can be one of the largest areas of expenditure for entrepreneurs and small business owners. You have to meet clients and track down new partners and opportunities, but airfare, hotels, and per diem can end up costing an arm and a leg.
You shouldn’t wait to streamline your company’s travel policies. From locking-down company credit card access to banning travel in the high seasons, there’s a lot you can do to keep business travel from eating up your budget.
It takes ingenuity to start a small business, but it doesn’t stop at a good idea. Keep these strategies in mind when you’re balancing the books and make growth a priority.
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