3 Things That Can Help Cut Small Business Costs
Today, there are more than 28 million small businesses in operation throughout the country. While each one has its own brand and its own goals, they all rely on growth for success. At Prager, we know owning a small business can be tough and it’s important to keep costs low in order to operate. That’s why we wanted to share this article from American Express and USA Today that discusses three ways your small business can cut costs:
“As a business owner, it’s often a struggle to keep costs low to maximize profits. Not every cost can be cut, nor should every cost be cut, as quality should never be sacrificed.
Here are three things you can easily start doing now to help cut costs and start seeing positive results according to other small business owners.
1. Be smart about marketing and advertising
Your customers are your strongest assets to build buzz and excitement. Incentivize word-of-mouth by finding ways to reward clients for the friends and family they introduce to your business. Rewards can include discounts or free products and services. Consider incentives that will drive incremental revenue such as spend X amount on your next visit and get Y.
Collaborating with other businesses in your area is another effective marketing tactic. Consider working with neighboring businesses to fund joint campaigns around key times of year and cross-promote one another. By participating in diverse community events, you can also introduce your business to new audiences that may not stumble upon your business on their own.
“We started an in-house meet-up series called Halfway to Friday where creatives can engage in our space in an unpretentious networking setting and we are partnering with local art non-profit Fleisher Art Memorial,” said Shannon Maldonado, owner of YOWIE, a home and lifestyle boutique in Philadelphia. “I have also worked to be very involved in the neighborhood surrounding my shop and I look forward to growing YOWIE as not just a store but an intersection of design and community.”
2. Review your expenses regularly
It’s super important to review your expenses to ensure you are getting the best rates for the materials and services that you need to run your business, as well as to help cut any unnecessary costs. “While most small business owners know that accepting credit card payments is a cost of doing business, do your research to help ensure you are getting the best rates possible” said Ramon Ray, four-time entrepreneur and best-selling author.
For example, American Express has changed the way it works with small businesses with the introduction of their OptBlue program. With OptBlue, American Express no longer sets the rate, merchant providers do, which means you could find a better rate for your business. Business owners also get the benefits of a single statement for all major card brands they accept, fast deposit into their account, and one contact for all servicing.
“American Express is a huge part of our business,” said Liz Goldberg, owner of the full-service Raleigh-based design firm CAROLYNLEONA. “We know our clients have peace of mind when they use their American Express Card.”
“Offering different payment options is really important because it can help build trust and creates inclusiveness,” said Jacquelyn Thompson, owner of Stella & Nash boutique in Indianapolis. “I like the effort American Express makes to reach out to its merchants and support small businesses. From the window stickers they sent us for our new storefront to Small Business Saturday, you can tell American Express really cares about small businesses.”
American Express actually offers a number of programs that help business owners connect with more customers at no cost. One of the ways they do that is by providing free open/closed signs, hours of operation decals and other items to accepting merchants to show that credit cards are accepted. They also recommend small businesses to Card Members who shop at businesses like theirs. According to American Express, in 2017, the company provided more than 15 million people with recommendations on where to shop.
3. Start negotiating with your vendors
Knowledge is power. It’s important to know your options when you consider what suppliers and vendors you can work with to support your business. If there are any competitors to current suppliers, compare pricing and negotiate to get the lowest cost for your needs. Consider buying in larger quantities if you can get a lower cost per item, but make sure you only buy what you will actually use.
“Working with large clients introduced a new level of volume for us, which introduced cost savings,” said Taylor Ahlmark, owner and founder of Maak Lab, Portland Oregon-based scent lab. “A lot of stuff we deal with are large commodities like olive oil so buying in bulk is key. We seek out vendors that offer savings for bulk orders.”
For new and established business owners, it’s important to be savvy about your finances and constantly evaluate how you can keep costs low and profits high.”
At Prager, we can help you maximize your profits with a marketing program customized for your small business. We offer a variety of marketing solutions that can be tailored to your goals. View our Solutions page or give us a call to discuss a strategy for your small business.