When you start a small business and do everything you can to grow it, you have to constantly juggle a wide variety of tasks. From sales, marketing and admin processes, through to customer service, inventory management, production, accounting, and more, there will always be many things competing for your attention.
However, no matter the industry your business is in, or how far along it is in its growth cycle, you need to be careful to never spend so much time on other jobs that you forget to keep track of finances. A lack of cash flow, and/or too much debt, is a common problem that causes many entrepreneurs to sell or shut down their businesses prematurely.
To ensure you keep your business afloat and growing, keep looking for ways to cut costs, both large and small. Read on for some top tips you can follow today to give you more breathing room in your bottom line.
Choose the Best Payment Setup
One cost that can really add up over the long term is payment-processing fees. Most businesses these days don’t just accept cash payments or checks, but rather cater to consumer demand and provide customers with a way to pay using their credit or debit card, PayPal account, or other internet-based option.
While this is certainly worthwhile when it comes to increasing conversions, either online or offline, the charges put in place by banks, PayPal, and the like can eat into profits. You not only have the per-transaction cost to consider, after all, but also potential fees to set up and integrate a system, or to utilize a POS machine or other infrastructure.
As a result, to cut costs in this area, it is important to look around for a better deal for your business over time. While the payment processing provider you chose when you first established your business may have been offering the best option for you then, as your sales grow and/or new competitors come onto the market and conditions change, better deals can become available.
When comparing providers, factor in the total costs you will be charged for a period. Keep an eye out for early-termination cancellation fees, extra costs to accept certain payment types, or other hidden charges that can add up over the long run, and also ensure you find a plan that suits the amount of sales you have now.
Keep in mind that customer-service support and a high level of security is also important when choosing a provider. Look for payment architecture that will work best for your business because you can get help whenever you need it, and ensure your payments will be highly secure. With cybercriminals finding so many ways to put through fraudulent payments and to gain access to customer details these days, having a secure system can save you money when it comes to paying for charge-backs, legal teams, and IT providers too.
Get Customers to Pay You Sooner
Another good way to cut costs in your business when it comes to finance is to get your customers to pay you sooner. If you operate an organization whereby clients get to pay on account (e.g., 30 days after a purchase), rather than at the time they acquire goods or services, you likely end up spending a lot of time and money each year chasing up late payments and covering outstanding bills. To reduce costs then, find ways to prompt customers to pay in a timely manner.
Start by being strict about your payment terms, and make it clear to people going on account that they only have a certain amount of days’ credit with you. You should always make it easy for clients to find your bank account details and the payment terms on your invoices, so they don’t have to go searching for information and put off a payment as a result. Once your bills have been sent out, keep an eagle eye on them and start sending out reminders as soon as they become overdue by just one day.
Spend Less Money on Bank Fees and Loans
Lastly, banks and other lenders and financial institutions can also end up getting a significant amount of cash from you over the years because of the fees and interest they charged on your bank accounts, credit cards, and business loans. If you want to cut costs then, look for ways to get better terms.
While many banks charge monthly account-keeping fees and yearly credit-card account costs, if you tell your provider you’re looking elsewhere, they may be open to waving these fees. Alternatively, if you look for a new bank, and offer to start doing all your business through them, you might be able to get a better deal that way.
When it comes to loans, you should also shop around to see if you can refinance at a lower rate of interest. However, before you swap, do take care to read the fine print on your current business loan, just in case the early termination fee is hefty and ends up cancelling out any interest gains you would get elsewhere.