Frugality can be a good virtue to possess in many parts of our lives. This is very true for small business owners. The more frugal a small business owner is when making purchases for their business, the more financially healthy their small business is going to be. Being frugal as a small business owner does not mean you are cheap. Being frugal as a small business owner can be looking at all of your purchases with a long term approach. A decision that may cost you more today, may save your business over the course of the next ten years. Here are four ways to be frugal as a business owner the right way.
Buy in bulk
Buying in bulk can help your business saving a lot of money. Buying in bulk should be done with a lot of thought and a strategy in mind. Only certain products are necessary for buying in bulk. If you own a restaurant, buying toilet paper or hand soap for your restrooms in bulk is a wise choice. Buying coffee for your employees to use in the breakroom might be a good benefit to your employees, but buying a year’s supply may not be necessary for a start up. That cash could be better spent towards other parts of the businesses bottom line. The amount and types of products you buy in bulk will be different depending upon the industry you operate in and the location of your business, but buying in bulk is a great way to become a frugal business owner.
Buy second hand equipment
Another great way to save some cash for your business, is by buying some necessary equipment second-hand. One obvious place to do this is if you have to purchase vehicles for your employees to use, it is wise to consider purchasing those vehicles used. There are other types of equipment that can perform extremely well used. Computers and other electronic devices can be significantly less if you buy them used or refurbished. In many cases they can be several hundred dollars less. If you have an office where you need to purchase a few dozen computers, the savings can be in the thousands if not tens of thousands of dollars.
Sublease your unused office space
If you own the property you operate in, you can sublease some of your facility to another small business. In today’s digital age, many people work remotely or entirely from home. Many of these people need a place to just get out of the house or a place to meet with customers in a formal setting, but they are not looking to spend the money a full office would cost. You could rent out a small portion of your facility out to them at a lower rate than they could get elsewhere.
Shop your commercial insurance policies periodically
It is important to shop around your policies every few years. This is important to make sure you are getting good coverage and to check what you are paying for premium is competitive. At the same time, it is not a good idea to switch any time another carrier offers you a lower price. This is a very short term way of looking at your relationship with both your insurance agency and your insurance carrier. Switching every year based on price can create bigger problems when you experience a year in which you have a large claim or several small claims. When you have a year with claims, it is better for you to have an established relationship with your agency and carrier in order to limit the amount of increase in premium or prevent them from dropping you from coverage altogether. This is a good thing to keep in mind the next time you are looking to insurance shop for your small business.