Learning how to save money in your business is something that all entrepreneurs should do, no matter how big or small your business is. (Although, since spending money is FAR more fun, this can be tricky for business owners to actually accomplish.)

Entrepreneurship can be challenging within itself, but when you have money in the bank, those issues are often a lot easier to deal with!

And did you know that a lot of entrepreneurs don’t even know how to effectively save money in their business? Yes, YOU are probably spending more money in your business than you need too.  

Lucky for you, that is where we come in. In this blog post, we share the importance of saving money and exactly how to save money in your business. Keep scrolling to find out!

Why Save Money in Your Business

Financial stress is one of the biggest issues that entrepreneurs deal with. Which probably isn’t surprising. 

Last year it was reported that 1 in 2 small business owners (49%) believe their mental health has suffered from the stress of managing their business finances in the past year.

But if you’re not yet convinced to cut those extra costs, here are some of the top benefits of saving money as an entrepreneur.

You Can Reinvest in Your Business & Your Team

Saving a small amount of money aside each month means that you can reinvest that money back into your team.

Additionally, when you know how to reinvest correctly, you can use that saved money to make more money. Which is something that we all should be striving towards in business.

For instance, using saved funds for advertising can attract more customers and increase revenue. Similarly, investing in a team member’s skill development can enhance productivity and boost your bottom line.

You’ll be Prepared for Unexpected Expenses 

Unexpected expenses happen to all business owners. It’s unfortunate but a part of the process.

Knowing that you have money in your business bank account to cover these costs will help alleviate the pressure of these expenses when they come around.

It Reduces Stress

Running a business is hard. Therefore, any opportunity you can get to reduce stress, you should take it!

Saving money at the end of each month will help to reduce stress as you know that you have money that can help fuel the business if needed.

How to Save Money in Your Business

Now that you know why learning how to save money in your business is important, here is how to save money in your business.

Ensure You Have a Profitable Business

The #1 way to save money in your business is to start with a profitable business model and this gets SO overlooked!

In order to save money, you have to have revenue in excess of expenses or you won’t have any cash to save. 

So, you need to make sure that you’re planning to earn more than you spend. 

If you’re starting a new business, you can do this by researching how much your competitors are earning and their different revenue streams. You should then compare that amount with what you expect your expenses to be. 

If you’re already in business, well… you should know by now if your business model is profitable. If it isn’t, you may need to pivot direction or think of creating an alternative revenue stream. 

Understand Your Finances

The next step in saving money is actually to understand your business’s finances.

Without knowing what money is coming in and what money is going out, you won’t be able to save money.

Additionally, understanding which costs within your business are essential and which costs can be canceled will also help you eliminate extra costs that are not needed.

Getting everything together and seeing it all in one place can help you to evaluate where your money is being spent.

And we get it. This can be a little bit daunting. A lot of business owners will avoid their bookkeeping because as long as it is out of sight, they don’t have to worry about it!

But this is the wrong approach. 

One of the best strategies that we teach at TK Solutions is to set a monthly recurring task where you go over all of your bookkeeping tasks. This could include invoicing, paying payroll, and documenting your expenses for the month. 

By doing this, you can feel confident about your finances all year round, not just at the end of the financial year.

At TK Solutions, we help you to do just that! We make knowing your finances easy to understand for all business owners. You can contact us directly here to find out how we can help your business!

Set Money Saving Goals

When considering how to save money in your business, setting money-saving goals can be a motivating factor for you to stay consistent.

Working out exactly how much money you would like to have in your business bank account will encourage you to set money aside each month.

By doing this, you may even find yourself saving more money than you originally planned.

Avoid Impulse Spending

Yes, impulsive spending can happen in business too, not just in our personal lives.

When thinking of money-generating strategies for your business, you should consider whether this is the right option to invest your money in before you go ahead.

We suggest sleeping on the idea or asking a trusted advisor before taking the plunge. In our experience, anyone who is forcing a commitment to spend “on the sales call” or with immediate urgency doesn’t usually have your best interest at heart.

Taking risks and spending money in your business is essential but being cautious of whether the results are worth it first is far more important than you realize.

Cancel Unnecessary Subscriptions

You’ll be surprised at how many unnecessary subscriptions you are subscribed to.

Different tools and software can quickly become expensive and also…forgotten about!

Make a list of the tools you use and consider whether they are necessary or if there is another tool (which is less expensive) that could be used instead.

This is also a good time to check whether the pricing plan or user count you are on is the best suited option for you or if it can be reduced.

Ensure That You Are Not Overpaying on Taxes

The easiest way to save money for your business is to not overpay when it comes to taxes. Yet, so many people are!

Failing to claim expenses or not correctly working out your tax calculations can quickly increase the price of your tax payment.

At TK Solutions, we work with you to lower your tax bill, so that you can save that money instead! You can schedule a call here to find out how we can help you with your tax payments.

Budget for the Month

When wondering how to save money in your business, you need to consider your monthly business budget. Just like you would for your personal expenses.

Does anybody really like budgeting? Hm, not really! But facing your numbers head on is the best way to better manage your cash flow.

When you have a set budget for what you can spend for that month, it eliminates the idea of spending additional money (at least, it should!)

Setting a budget will also allow you to see exactly how much money you can save which will help you plan for the future. 

Reduce Unneeded Hours

Meetings are one of the biggest catalysts for founders and CEOs wasting money. 

Whether you work with freelancers, contractors, or employees having unnecessary meetings, or meetings that go way over the designated time, can become a costly expense. 

Meetings are sometimes necessary within your business but making sure that those meetings are productive and effective is vital to save money.

Next time you’re in a meeting, make sure you stick within the time given or ask yourself “Could this be sent in an email instead?”

Consider Remote Working

Are you currently paying for an expensive office space?

Office spaces, no matter where you are based, often come with a high price tag. 

In this digital age, you should consider taking advantage of remote working options if you’re looking to save on costs within your business.

Co-working in an office environment without the consistent space is a way to get together occasionally to have office connections without the ongoing expense of a lease. And a co-working event with your team, virtually, is also a fun way to do a little bit of water cooler talk and see the faces of your people while still getting the work done.

Team Retention

Lastly on this list of how to save money in your business is to look after your team!

One of the biggest costs to a business is finding new team members to hire.

Recruiting costs are expensive but also training the new team member takes a whole bunch of time that could be spent on money generating activities instead.

On that note, when you hire new team members, maintaining a positive and regular connection to your team is crucial in keeping everyone on the same page and enjoying their work.

Key Takeaways on How to Save Money in Your Business

That officially concludes this blog post on how to save money in your business.

Saving money in your business is vital just in case an expected cost arises or just to simply alleviate the pressure of running a business.

From keeping your team members happy to making sure your tax payment is correct, there are many ways that you can save money as an entrepreneur.

However, in our opinion understanding your finances and getting super clear about what is coming in and out of your business is the foundational step to saving more money in your business.

Here at TK Solutions, we make it easy for every business owner to understand their finances and feel confident in growing and scaling their business. Yes, even if you’re not a numbers person, you are welcome here!

Contact us to learn how we can help your business today.