If you run a small business, your budget is probably always on your mind, to some degree. Reducing costs can make the difference between success and failure for many businesses like yours. Fortunately, small businesses have a lot of ways they can cut costs. In this article, successful entrepreneur and investor Mike Eisenga shares the best ways you can reduce costs for your business.
Networking is vital for small businesses. Get in contact with other companies in your industry and in related industries. The personal contacts you make and insider tips you learn could work to your advantage in several ways, including helping you find cheaper supplies.
#2. Form a Barter Network
One of the other things you can do with a network of small businesses is form a barter network. Small businesses have a flexibility that big businesses don’t, so you may find it easy to convince others to barter goods and services when they can, reducing everyone’s costs.
#3. Find Free or Greatly Discounted Stuff
It can be relatively easy to find some deeply discounted and even free supplies. Look around for businesses that sell odd lots, or liquidate inventories from bankrupt businesses. There are also freebie sites that sometimes give away useful items.
#4. Buy Wholesale
You can save a lot of money by getting your business supplies in bulk to qualify for wholesale rates. All you need is a membership at a wholesaler warehouse.
#5. Buy Used
Most business equipment doesn’t need to be new. Find used equipment and supplies on eBay and other secondhand sales sites. You can also go to garage sales and secondhand stores and make some surprising finds.
#6. Rent When You Can
Some business equipment you only need for short periods of time. It might make more sense to periodically rent these items from an equipment rental store, or borrow them from other businesses if you can. Run the numbers for buying and renting, and see which is cheaper in your case.
#7. Buy at Auctions
Business supplies and equipment are often sold at auctions both online and offline. You won’t find something every time you go to one, but before you pay retail for something, try the auction option first.
As noted above, small businesses often have a lot of flexibility that larger businesses do not. A small business owner selling supplies or equipment you need might be willing to come down in price if they need the extra money, or are having a difficult time moving inventory. It doesn’t hurt to negotiate for the things your business needs before settling on paying full price.
#9. Plan Ahead
Keep a list of business equipment and supplies your business will need at some point in the future. Keep a lookout for big sales on the items you need and purchase them during the sale, even if you buy them before you need them.
#10. Keep Searching for New Suppliers
New suppliers go into business all the time. No matter how satisfied you are with your current suppliers, keep looking for new suppliers with lower prices.If you keep your eyes open, think ahead, and develop a good network of contacts, you should be able to keep your small business supplied for less than you would expect. That could make a real difference, even the difference between success and failure.
About Mike Eisenga
Mike Eisenga is a successful commercial real estate investor with a banking and finance background and is the former mayor of the City of Columbus. As a President of both American Lending Solutions, a mortgage lending company (he founded and operated from 2000 to 2018), and First American Properties, he has a track record of creating and operating successful businesses. Mr. Eisenga is also devoted to property development and construction, primarily serving smaller local communities. Especially in the senior housing sector.