We’ve all heard that a simple daily change can save thousands of dollars over the years. A classic example: cutting out a $4 cup of coffee a day will save you $1456 after 52 weeks. That adds up to some serious dough over the years, especially when your savings are put to smart use, such as in an emergency fund or reinvesting in growth.
Here are five types of simple changes you can make to your business that save a surprising amount of cash over time:
This happens on many levels. If you typically mail your advertisements, look at your mailing list and clean up those who are unresponsive, live too far away, definitely moved or are incorrect. Mailing lists typically have a margin of error of 20-30%. With the 2017 household cost per acquisition for direct mail being $26.40 (compared to $10.32 email, $20.32 social media, $16.22 paid search, $24.75 internet display source), eliminating 25% of a 5,000 person mailing list would lower costs from $132,000 to $99,000, saving $33,000 per mailer.
Then look at social media. See what target audiences are unresponsive to campaigns, what keywords aren’t working and what platforms have no click throughs. Blindly scattering your advertisements, by mail or internet ads, is a waste of money if you aren’t reaching those who matter.
Know your local policies. In some cases, a business may be small enough that with the right software, you can do it yourself. Otherwise, spending the money on a good accountant who knows the intricacies of the latest tax laws may result in an even bigger refund than you thought. Other ways to get a bigger refund include installing a renewable energy source, recycling old equipment and machinery and making charitable donations to thrift stores and Goodwill. Just be sure to get a donation receipt! The amount you donate reduces the amount you’re taxed on. Donated $8,000 of appliances? That’s $8,000 less of your annual revenue you’re taxed on!
Stay on top of accounts payable and receivable. Always. If you wait until a reminder is sent, you could end up paying extra in late fees. Some companies will even offer a discount if you pay the total sum up front. Saving 5% on a $10,000 shipment of steel would save your company $500 per shipment. If that shipment is once a month, you’re looking at $6,000 a year.
On the opposite end, waiting too long to get paid by customers could result in loss of profit if those sneaky invoice evaders slip through the cracks forever.
Get a programmable thermostat that keeps the temperature comfortable during the day and moderate on nights and weekends. Reports on home energy costs say that programmable thermostats can save 10-12% savings on heating and 15% savings on cooling when turned down for 8 hours a day while at work. Now flip that. A business ONLY has to provide heating or cooling for ~8 hours a day. If a house saves about $150 a year, a medium sized office could save upwards of $200 (source).
As of 2017, the average office worker was said to use 10,000 sheets of paper a year, 45% of which ended up in the trash. Doing amore work digitally can save you A LOT in paper costs (source). If you spend $35 on 2,500 sheets of paper, cutting 45% of paper costs would save you $63 off of $140… per employee.
Depending on the size of your business, having remote employees could really cut office space rental costs. You can also reevaluate better health care options for your office culture, hotel points if travel is involved, and inspire employees to work harder by offering commission.
Reflect on your day-to-day, month-to-month and year-to-year business operations. What small changes can you make to save thousands in the long term?