10 Innovative Cost Saving Ideas for Your Small Business
As a small business owner, you know better than anyone the tightrope walk your margins present. You probably have an entire team of employees to think of, as well as the future of your business. You also know your customers might not take kindly to blatant price increases.
So how do you find a balance? We’ve rounded up 10 of the most innovative cost saving ideas to help your small business save money and increase profits this summer. To focus your efforts, we’ll break these down into three categories:
- Marketing cost saving ideas
- Money management cost saving ideas
- Administrative cost saving ideas
Let’s dive in.
Marketing Cost Saving Ideas
Whether you’re an advertising pro or new to the world of marketing, these strategies will help you build a lean, efficient marketing budget that gets results.
#1 Embrace Guerrilla Marketing
Guerrilla marketing is a marketing strategy that involves low-cost, innovative tactics that draw attention to your business.
Take Liberty Tax Service, for example. Since 1997, the business has used street entertainment and their very own costumed Lady Liberty to attract more business. They’ve found that for every two hours Lady Liberty is on the street, they get one customer.
How can you utilize this approach?
- Make a spectacle within your community – Consider ways to grab your neighborhood’s attention. Perhaps you can sponsor an art contest and provide products or services for free as a first place prize. Not only will you be the talk of the town, but you’ll benefit from an array of artistic content to post across your marketing channels.
- Remix your social media accounts – Social media accounts embody the voice of a business, and when that voice gets a makeover or sings a new tune, it catches people’s attention. For a week, have your social media accounts be “taken over” by an alter ego, a family pet, or the company mascot—keep the content positive, friendly, and always connecting back to the benefits of your business. Incorporate a few giveaways and your digital guerrilla marketing strategy will get even more attention.
- Random acts of kindness – Do you have customers that have made all the difference in your business? Reach out to them to offer a personal service or product—one kind act ripples out to create a sterling reputation.
Be aware, guerrilla marketing can be ineffective when executed poorly. In 2021, Minor Figures, a London oat milk brand, went viral in the worst way after posting their advertisements all over Philadelphia, covering up beloved local street art along the way. The company quickly had to issue an apology to angry artists everywhere.
#2 Reposition Traditional Advertising Spend to Long-Term Marketing Strategies
Traditional, high-cost advertising (TV ads, radio ads, billboards, etc.) has one sole purpose: to get eyes on your brand right now. However, the problem with traditional ads is that once they disappear, they stop returning value.
Long-term marketing strategies build atop of past performance, providing value long after they’re initial use. These marketing strategies typically involve some form of content creation, such as:
- Social media posts
- Blogs
- Email newsletters
And these strategies aren’t created in isolation. With a well-formulated blog post, you can push this piece of content through social media posts or an email newsletter, tripling the reach. Similarly, you can have an email newsletter dedicated to your best social posts of the year—reliving the top moments with customers.
#3 Take Advantage of Free Marketing Channels Like Nextdoor
For small local businesses, the far-reaching possibilities of social media are often more of a hindrance than an opportunity. Despite wanting to reach a dedicated audience in your local area, you may spend hours and a ton of ad spend communicating with people halfway across the country.
With Nextdoor, all members are verified local neighbors. That means that when you’re addressing your audience, the people who are listening are the ones that matter most—those who are patronizing small businesses in your area.
Once your Nextdoor Business Page is set up, you can establish a presence in your local community, join the conversation, and let them know about updates and promotions through Business Posts.
Best of all, it’s a marketing channel that’s completely free.
#4 Host a Local Event
Hosting events can help you connect with your neighbors to grow your customer base. But festivities such as a gala or speaker series can be expensive. To help with costs, connect with local sponsors who will help fund your event in exchange for advertising space. Finding sponsors who are in a related sector will ensure the success of this partnership.
If sponsors are out of the question, you can turn the event into a community block party. Communicate with other businesses in the area and find an ideal weekday or weekend to host the event.
Each business can bring their own advertising agenda, whether that’s handing out flyers to passersby or bringing their wares to the sidewalks.
Money Management Cost Saving Ideas
Your money management practices are an obvious target for cost saving practices. These six business cost saving ideas will help you better balance your checkbook.
#5 Utilize Work Exchanges Rather than Paying For Services Outright
Every business runs on margin. This means the actual costs of services—as in the cost to produce a desired result—is far lower than its listed price.
You can use this information to your advantage.
For example, consider a work exchange between a local accounting firm and a legal office. When tax season rolls around, the legal office may wish to offer legal services and contract help in exchange for CPA support. Rather than paying full price on services and increasing each business’s expense sheet, they can exchange work where they’re only paying for the cost of services, rather than the listed price.
#6 Aim to Save 10 Percent of Your Annual Revenue in Cash
Being a “liquid” business allows for flexibility and repositioning when it’s needed most. To be liquid is to have cash on hand.
Jody Grunden of Summit CPA Group tells Forbes that any small business owner should aim to save 10 percent of their annual revenue in cash in the bank each year. For businesses that involve a high amount of risk and uncertainty, Grunden suggests increasing that percentage.
But why 10 percent? After analyzing many successful small businesses, 10 percent is the golden ticket. It’s an achievable, but sizable, sum that will ensure you always have the liquidity to make smart business decisions.
#7 Collect Cash Upfront
Do you operate a business where your products or services cost a lot of money? If so, the U.S. Chamber of Commerce recommends that small businesses collect at least a percentage upfront when customers pay with cash. This practice helps:
- To reduce risk
- To improve cash flow
- To save money
The Chamber of Commerce suggests requiring a 25 percent down payment on all purchases, rather than collecting cash later and opening yourself up to risk and losses. Not to mention this extra upfront cash allows your business to be more liquid and flexible should you need to pivot.
Administrative Cost Saving Ideas
Whether you employ an administrator or take care of this essential work yourself, you know that a lot goes into your business's operating cost. Reduce waste and maximize efficiency with these six innovative cost saving ideas.
#8 Send Thank You Notes to Employees
For no more than the cost of postage and a few well-meaning words, you can make a powerful impact on employees’ well-being. But while gratitude is a buzzworthy term these days, is it really a profit-driving strategy for small businesses?
Turns out, yes.
Bersin & Associates performed an employee engagement study to find that businesses who recognize and thank their employees for their work see a 14% improvement in employee engagement, productivity and customer service. This improvement then translates to happier customers and more efficient workflows, saving businesses money in the long run.
#9 Consider Leasing Equipment
Equipment can be a significant upfront cost for both new and established businesses. Add in repairs, upgrades, and maintenance, and equipment can become a veritable vampire for your budget.
It’s not always feasible or more efficient, but explore leasing options for equipment to determine how you can maintain liquidity now and save more money long-term.
#10 Go Green and Paperless
Environmentally friendly practices are more than just a trend. They can also be a healthy financial tool to cut down on wasted spend. Try implementing a few simple cost-saving, eco-friendly practices, such as:
- Setting up automatic lights that turn off when office space is not in use
- Reducing single-use waste items
- Installing water-efficient plumbing fixtures
- Going paperless and using digital means where possible
While each individual step toward a green workplace has small benefits, they compound to a lower utility bill and a better bottom line.
Maximize Your Cost Saving Capabilities
Between your marketing, financial, and administrative practices, there are countless strategies for you to reduce costs, increase efficiency, and grow your business. Hone in on a specific category or mix and match different ideas that best fit your small business. By implementing each cost saving idea, your business will start to run like a well-oiled, money-saving machine.
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Additional sources:
Annie Mueller. 27 Money Saving Ideas For Small Businesses. https://www.americanexpress.com/en-us/business/trends-and-insights/articles/27-money-saving-tips-from-successful-small-businesses-annie-mueller/
Michaela Winberg. After ads disrespect Philly street art, London oat milk brand faces backlash, calls to invest in local creators. https://billypenn.com/2021/04/13/philadelphia-street-art-advertising-walls-for-justice-oat-milk-wheatpaste/
Forbes. 14 Lesser-Known Money-Saving Tips For Small Businesses. https://www.forbes.com/sites/forbesfinancecouncil/2020/06/22/14-lesser-known-money-saving-tips-for-small-businesses/?sh=469ff9206768
Minority Business Development Agency, U.S. Chamber of Commerce. 10 Cost Saving Ideas for Small Business Owners. https://archive.mbda.gov/news/blog/2012/06/10-cost-saving-ideas-small-business-owners.html
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