Small businesses are the backbone of the American economy, but they often lack the capital needed to expand and create jobs. A recent study by the National Small Business Association found that small businesses only receive a fraction of the capital available from banks and other lenders.
This lack of capital hurts small businesses and the economy as a whole. Small businesses create about two-thirds of all jobs in the United States, generating more than half of the country’s GDP. However, most small businesses have difficulty accessing credit because they cannot meet traditional lending criteria.
There are many ways small businesses are getting the capital they need to sustain themselves. Crowdfunding is an increasingly popular way for small businesses to raise money. Platforms like Kickstarter and Indiegogo allow entrepreneurs to connect with investors who want to support their business idea.
In addition, many local governments are offering grants and other incentives to help small businesses succeed. For example, programs like the Small Business Innovation Research Program provide early-stage research and development funding.
However, one of the best ways small businesses ensure that they have the capital for the coming years is to save money. Here are ways you can do that.
Telecommuting
Telecommuting helps you save on office space and other overhead costs. So if you have the option to work from home, take advantage of it. You’ll save on gas, public transportation, and other commuting costs. It’s estimated that remote workers save about $4,000 by working at home, and businesses can save double that amount per worker.
Moreover, telecommuting can also reduce pandemic-related costs. For example, businesses with employees working inside a physical office have higher infection rates. A single infection can mean dozens of lost workdays. By allowing employees to work remotely, you can help protect your business against this risk.
Cutting Back on Inventory
Small businesses often have too much inventory on hand, which ties up capital that could be used for other purposes. If you don’t need it, sell it or get rid of it. Reducing your inventory will free up cash that can be used to pay bills, invest in new products, or hire new employees.
You can also save money by reducing the amount of inventory you order in the first place. Many businesses order more inventory than they need to get discounts from suppliers. However, this practice can backfire if you end up with too much merchandise that you can’t sell. Instead, always order just enough to meet your needs.
Move to On-demand Production
If you’re part of manufacturing and want to reduce overall inventory costs, then maybe it’s time to consider on-demand production. This type of production means that you only make products when there’s an order for them. You’re not stuck with much inventory that you can’t sell.
On-demand production can be expensive, but it can save you money in the long run. You won’t have to pay for storage space or inventory insurance, and you’ll never have to worry about obsolescence.
Utilize Government Benefits
Government-related benefits such as tax deductions can help small businesses save money. For example, you can deduct expenses such as employee health insurance, travel costs, and professional development courses. These government benefits can also depend on the state or country. For example, the United Kingdom and Ireland offer a capital allowance for accounting firms. This can help these firms save money when they purchase certain assets for their business.
It’s also important to make sure you’re claiming all of the deductions you are entitled to. Many small business owners miss out on valuable tax write-offs simply because they don’t know about them. Consult a financial advisor or tax expert for help making the most of your benefits.
Go Digital
Digital technology can help small businesses save money in a number of ways. For example, online accounting software can help you track expenses and manage your finances more efficiently. Cloud-based storage solutions can also help you reduce the need for physical office space.
In addition, digital marketing can be a cost-effective way to reach new customers. Social media marketing and search engine optimization are two affordable ways to promote your business online. You can also use email marketing to connect with customers and grow your business.
Saving money is essential for small businesses. By taking advantage of government benefits, utilizing digital technology, and cutting back on unnecessary costs, you can make sure your business has the capital it needs to succeed.
Conclusion
Small businesses are vital to the American economy, but they often lack the capital needed to expand and create jobs. There are many ways small businesses are getting the capital they need to sustain themselves, including crowdfunding, grants, and saving money.
Telecommuting is one of the best ways small businesses can save money, and on average, it can save businesses $11,000 per employee per year. In addition, utilizing technology can help small companies to save money in many ways, including online accounting software, cloud-based storage solutions, and digital marketing. Finally, government benefits can also help small companies to save money.
Follow these options and save money in your business operations today!
