Every business needs equipment and regular supplies to keep their company running and to meet the demands of their customers, but the strategies you use to buy those items can make a big difference to your profitability.
Here are some budget-friendly ideas for keeping on top of your ordering process and saving as much money as possible.
Here is a look at the many different ways of saving money that is now available, including a modern way to get your software, a strategy for larger purchases, plus tips for cheaper calls and savings on equipment and furniture.
Keeping up with technology
A major expense for many business owners is the challenge of keeping pace with technology and one area where there are significant savings to be made is how you buy your software.
Most businesses rely on some form of the software program to run their accounting and documentation functions and the traditional approach in the past was to buy an off-the-shelf software package that best suited your requirements.
The big problem with that strategy was that almost the minute you bought the software it was out of date and a new version became available shortly afterwards.
The way around that issue is also a cost-effective solution that doesn’t involve buying redundant software packages that become obsolete. If you subscribe to cloud-based software, it is often much cheaper to pay for it that way, plus you get the benefits of updates as and when they happen, as part of your ongoing deal.
Keeping cash in the bank
Strong cash flow and reserves should be the goal of any forward-thinking business and it can be tempting when you are thinking of buying equipment for powder coats, for example, to use that cash and buy the equipment outright.
It is always a good idea to get a professional opinion when it comes to making a major purchasing decision as it could work out better for your business if you lease the equipment rather than buy it outright.
Your upfront costs will obviously be lower when you lease rather than purchase and as well as potential tax advantages when you lease an item, you also have greater flexibility in terms of updating it when the lease comes to an end.
Tax tip
It is possible that your business might be able to take advantage of a small business tax scenario that allows you to deduct equipment and supplies against your taxes.
The main rule is that any asset you are deducting has to be used primarily for business purposes and as you would expect, certain purchases are excluded from the scheme.
Ask about Section 179 and see if there are some ways you could save money by deducting certain purchases against tax.
Save on calls
If your business makes a lot of outbound telephone calls it can soon add up to a significant cost every month, unless you find a way of getting a cheaper deal or use technology to drive down the cost lower than traditional call bundles.
The answer might be to subscribe to a VoIP service. Voice over internet protocol is a system that will give you the ability to make phone calls over the internet.
In addition to the potential savings to be made when you subscribe to a VoIP service, there is also the benefit of knowing that any software upgrades or maintenance issues are sorted by the provider, which is significantly cheaper than having a traditional phone system and paying to have it maintained.
Join the club
Bulk purchasing power is never to be underestimated and there are several options that are worth pursuing in order to get a better deal from your regular suppliers.
Check out whether you can sign up for a membership at warehouse stores and trade associations. Many of these organisations offer additional membership benefits alongside regular discounts, such as access to cheaper insurance deals and other things you might need.
Do you need to buy new?
Another source of significant savings is when you decide to purchase used equipment and furniture rather than buying new.
There are plenty of factory liquidation sales and auction sites where you might be able to pick up nearly new equipment at significantly lower prices than if you were buying new.
You can often write down depreciation against a tax on new items but for the sake of your cash flow, it makes a lot of sense if you can find what you want without paying the higher price of new in the first place.
Follow some of these budget-friendly tips and there is a fair chance your business bank balance will look healthier.
