Startup Savings: Everyday Tips for Frugal Business Owners

Emma Sturgis

September 29, 2015

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Starting a business means that every dollar must stretch as far as possible to boost the bottom line. Regardless of their size, startups can use some of the following everyday tips for frugal business owners to make the most out of their new venture.

Dual Purpose Advertising

Advertising costs money, so use existing paperwork to make the most out of your advertising dollar. Cut postage expenses to the bone by putting advertising inserts into the same envelope as account statements. Ads can also be printed separately or on the back of receipts and inserted into bags when customers check out. Sometimes advertising can be printed directly on bags for little additional cost.

Share the Spotlight

Startups can join forces with neighboring businesses to share the costs of special sales, advertising campaigns, promotional materials and other expenses. Joining another business also helps build important connections for your personal and professional networks. Startups can also stretch dollars by increasing their purchasing power by combining their orders from suppliers. Additionally, small businesses can reduce their postage expenses by combining their mail with other companies to take advantage of bulk-rate postage.

Use Business Checks to Save on Payment Fees

Startups can save on payment fees when making business purchases, by using checks. To save time, businesses can use one of the popular small business accounting packages to automate the payment of checks. Businesses can save even more money by ordering checks online, bypassing the expensive options offered by banks.

Harvest Personal and Professional Networks

Entrepreneurs with a strong network of friends, colleagues, suppliers and customers, can tap them for help spreading the word about their business. Even in the age of the Internet, word-of-mouth campaigns are effective in generating sustainable sales. Each referral costs almost nothing and can yield sales and additional referrals.

Promote Expertise

Business owners can use their special skills or authoritative experience to promote their business in the community, by giving radio and television interviews or teaching classes at local schools and colleges. Doing so gives a business goodwill and positive regard, opening doors to new sales opportunities.

Minimize the Number of Employees

Hiring employees requires compliance with innumerable laws and regulations, causing many entrepreneurs to try to do all the work alone. Startups can get help, without hiring traditional employees by using interns, independent contractors, and staffing companies. The use of temporary employees can also help control labor costs, especially during peak sales periods. Businesses can also keep labor costs down by hiring people based on straight commission.

Everything from virtual assistants to copywriters is available online at a low cost. Businesses can use the many affordable services available on the Internet to reduce labor costs, rather than paying expensive consultants and other professionals.

Update Mailing Lists

Businesses that regular use the mail for advertising can save money by requesting address correction services and updating or removing bad addresses from their mailing list. This ensures that as much of your mail as possible reaches potential customers.

Starve the Tax Man

Taxes constitute a major cost of doing business, so stay on your toes to keep as much of your money as you can. Every dollar of tax avoided goes toward making a business more profitable. This means carefully documenting all expenses, logging vehicle business mileage, deducting the costs of business travel and meals, and taking advantage of all available deductions.

Quickly Address Customer Complaints

Cash-starved startups often cannot afford legal representation for lawsuits, so businesses can save money by quickly settling customer complaints can. Issuing refunds or replacements, even when the customer is wrong, can save months of painful and expensive litigation. Resolving grievances can also help stop the spread of negative comments by word of mouth or on social media.

Frugal entrepreneurs, whether at the helm of a new startup or running an established small business, can use these tips to save money on everyday expenses. Knowing how to spend your business’ money is as essential a skill for entrepreneurs as knowing how to make it in the first place.