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Small business owners spend an average of $40,000 in their first year of business, according to Shopify. Covering rent, payroll, inventory, marketing, and small business loan payments is challenging.
That’s why it’s a good idea to regularly assess what your business is spending money on and look for potential areas to scale back. Below are just a few suggestions, though there are plenty of other ways to improve your business’s finances, depending on your industry.
Still, here are three easy ways to save at least $1,000 annually by making financial adjustments.
1. Use the right accounting software
The U.S. Small Business Administration says that 38% of small businesses use specialized software. That’s not all that surprising, considering that many businesses need help keeping track of expenses, inventory, and payroll.
However, a surprising amount of businesses don’t fully utilize all the features of the software they have. A Forbes article noted that most small businesses only use 20% of the accounting software they’re paying for. The top level of QuickBooks costs $200 per month, while the next tier down costs just $90. If your business can scale back to the lower tier, you could save $1,320 annually by scaling back your accounting software.
2. Assess your marketing expenses
A recent report showed that many small businesses spend up to $1,000 per month on email marketing. Depending on your business size and how you need to communicate with customers, this could be a reasonable amount of money to spend.
But many small businesses don’t need to spend anywhere near that for their email marketing software. The best way to reduce this expense is to compare different email software and find the right one for your business. Finding a cheaper option could save one month’s worth of email marketing costs, keeping an extra $1,000 in the bank.
3. Open up accounts that have good offers
Part of streamlining your business’s finances means having access to capital and finding the best bank accounts to meet your needs. There are a lot of factors to consider when choosing both, but if you’re on the lookout for some extra cash, you may be interested in what some banks are offering.
For example, some business credit cards will give you a welcome bonus worth $1,000 or more if you spend a specific amount in the first few months of using the card. Similarly, it may be a good idea to shop around for business checking accounts, which can sometimes have monetary welcome offers for opening a new account and depositing a certain amount.
Finding the right financial partners when growing your business is extremely important, so do your homework before opening new accounts.
Get serious about your expense management
While it may not be the most fun part of running your business, tracking expenses can be one of the most important things you do to keep your business financially healthy. Even if you can’t find ways to cut back on spending, knowing exactly where your money is going and what’s coming in will give you a clear picture of where your business is headed.
Fortunately, there are some excellent expense management apps that easily help you stay on top of costs. Most software companies will give you a free trial before you make your purchase, so spend some time comparing features to find the best option for you.
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