In an economy where businesses big and small are having to find increasingly creative ways to stay afloat, saving cash is crucial. It’s also difficult to do when you’re already counting cents. And stressing about keeping your business afloat is rarely conducive to thinking up creative ways to find and save extra cash. Fear not, I’ve done the hard work for you.
Here are five lesser-known cash saving tips that you can implement today:
1. Continually build an (adequate) buffer
A financial buffer is like an airbag. You never want to have to rely on it, but it’s crucial that it’s there in the first place. How much you save is up to you, but the rule of thumb is to save a minimum of five percent of your total revenue. If that’s not feasible, start with something. And if you’re struggling to put a set amount away each month, try to reframe the way you think about the act of saving. Many people tend to view it as a “should”, as opposed to a “must” – to their detriment. Put differently, building up a financial buffer is non-negotiable, like filing your taxes or paying your staff. To eliminate the chances of conveniently forgetting, set up an automatic monthly debit and go about business as usual.
2. Embrace the art of negotiation
My father, a serial entrepreneur and renowned penny pincher, used to tell me upon entering the corner store, “If you don’t ask, you don’t get”. And by gosh darnit the man bargained our soft serves down from R5 to R4.50, three times out of ten. His follow up quip? “The worst someone can do is say no.” The man was onto something. Negotiating is an art, and asking for a discount takes a lot of practice – especially if you’re someone who shies away from any sort of vulnerability in the workplace. If you’re hesitant to plaster a smile of confidence on your face and negotiate, it’s worth remembering that in a struggling economy, everyone wants their business to suffer as little as possible. This means that vendors are often happy to re-negotiate prices or supplier terms if it means keeping you on as a customer. May the odds be ever in your favour.
3. Tap into fresh new talent (and invest in SA’s youth at the same time)
Our catastrophic youth unemployment rates are the highest in the world. If you have the capacity to train someone who’s willing and eager, do so. You’ll save money and shape someone’s career – a noble cause if there ever was one. If or when you advertise an opening, highlight the fact that you’re looking for young applicants and that no experience is needed. Getting a foot in the door is a hurdle that we all face at some point or another, and in our dismal economy, giving someone who’s fresh out of school or varsity an “in” is a worthy endeavour.
Growing a business is exhilarating, exhausting, and everything in between. It’s also filled with growing pains as you expand, hire more staff, and ramp up operations.— Yoco (@Yoco_ZA) September 7, 2021
Here's 5 common small business growing pains, and how to beat them 👩💻 https://t.co/4808wZZOHe
4. Set financial goals
Without an end goal in mind (even if it’s a bit hazy – like Days of Our Lives flashbacks when Marlena was possessed) – trying to save cash is a whole lot trickier. To use another metaphor, you’re running a race, but there’s no finish line in sight – it’s super tempting to throw in the towel at the first sign of a leg cramp. Besides making the act of saving easier, clear cut financial goals are crucial if you plan on applying for funding or taking on investors.
5. Be smart about your tax
I’ll keep this one brief because I know how everyone (myself included) feels about the subject.
If you’ve got a mind for numbers, by all means, have at it, but before you embrace e-filing, make sure you know how to set up your returns in a way that works in your favour. A little bit of extra graft can see you saving a substantial amount in the form of savings or deductibles. In addition, ensure you’re aware of any upcoming provisional payments in order to avoid a panicky search for available funds at the 11th hour. If tax isn’t your thing (I don’t blame you), find an accountant who specialises in income tax and who is well versed in the intricacies that are applicable to your industry. They’ll know how to structure your finances so that you can benefit from any, and a tax expert will be able to advise you on this.
Like the tortoise methodically plodding his way across the finish line, saving cash as you hustle is a one-foot-in-front-of-the-other, every-little-bit-counts endeavour that gradually gathers momentum. The most important bit? Making a start.