How to cut costs by forming business collaborations
Whether you are a grocery store coupon clipper or a savvy traveler who compares frequent flier and hotel point programs, saving money is a way of life for many of us. Small business owners often face the challenge of trying to cut down on spending, but don’t want to eliminate necessary costs. An effective way to lighten your business budget is to combine resources with another small business. Forming business collaborations will free up cash to spend in other areas of your company, and will provide you with a valuable networking opportunity. In this post, we’ll share cost cutting measures for business owners that can be made by working together with a fellow small business owner!
1. Split advertising costs – Marketing your business’s services is imperative, and a cost that you shouldn’t eliminate. One way to lessen spending is to try co-advertising with a fellow business owner. Doing so will not only save money but will likely increase customer exposure. You can split the cost of an advertising package, or market each other’s businesses in-store and on social media platforms. This collaborative effort will help you continue to generate new business, but without spending as much money!
2. Co-host events – Get to know your customers, promote your brand and make additional sales by co-hosting an event! These events will give you the opportunity to interact with customers, without breaking the bank. Both small businesses will benefit from this arrangement – aside from saving funds, a co-hosted event will allow you to reach each other’s customers.
3. Collaborate with businesses within your industry – This tip might surprise you, but you should consider teaming up with another business in your industry. For example, do you run a pet store? Working with a local veterinarian’s office could become an effective partnership. If you own a shoe store, you could collaborate with another nearby retail store, that specializes in clothing or accessories. Your businesses will be able to market to each other’s clientele, and even offer discounts for each other’s inventory.
4. Think about what your business is missing – Instead of spending excess funds on an additional service that your business is in need of, hire another small business to get the job done! Working together with other small businesses can be advantageous for all parties involved; if you are both in need of each other’s services, you might be able to provide discounted services. Do you own a restaurant? Instead of hiring outside delivery personnel, join forces with a local transportation business. They’ll appreciate the extra work, and you can provide them with discounted catering or another incentive. Thinking outside the box could help both businesses save money!
Reassess your small business budget and decrease spending by forming business collaborations. You should try cost cutting measures for business that help you save money, but also add value to your business. By joining forces with another small business, you’ll both be able to cut back on certain costs, and will have money for other areas of your businesses. Two heads (and two wallets) are better than one!
Editor’s Note: This post was updated for accuracy and comprehensiveness in November 2016.