Saving money never sounds like a bad idea. This is especially true if you’re a small business owner. According to the Simply Business 2025 Solopreneur Report:
- Nearly half of the surveyed solopreneurs (48%) have gone at least a month without income, revealing the significant financial rollercoaster inherent in being a solopreneur.
- A significant number of solopreneurs (68%) have less than six months of savings or no money safety net at all.
But as a small business owner, you know it’s easier said than done. Rising costs, inflation, and economic uncertainty are among the top concerns of U.S. small business owners, with 57%1 saying they feel stressed in today’s economy. Having a bit more in the bank can give you a little more peace of mind. Our tips below can help.
Six Innovative Cost-Saving Tips
1. Mind your invoicing & tax strategy
Paying bills and invoices on time is a best business practice and a good way to avoid late charges. But did you know that one way for small businesses to save money is to pay their invoices early?
Some companies give a discount to business owners who pay their invoices before the due date. Other vendors allow a discount if you pay for services or goods in bulk (e.g., paying up front for a 12-month service instead of paying monthly).
When it comes to invoicing contractors and vendors, don’t forget to consider the taxes you may have to pay on that revenue. When calculating your rates, back the tax rate into your service rate and set that portion aside.
For example, if you typically charge $100/hour for a service but know you’ll be state-taxed at 20%, you could charge $125/hour. Then keep that 20% of the payment in a separate account that you access only when tax season is due.
Using a good tool for invoicing will help you keep all your documents and corresponding accounts in order when tax season comes around.
Speaking of tax season — you also can include tax budgeting in your business plan. Don’t wait until March or April to organize your taxes. Instead, research what you can claim for deductions, such as your business office space and equipment, to know what you can take advantage of.
If you’re looking for a hand with this, our partner Collective can help.
Collective is a premier financial platform for solopreneurs, offering an all-in-one solution for business formation, taxes, and bookkeeping.
2. Untangle personal & business expenses
Some small business owners make the mistake of tying all their business expenses into one account. In reality, that practice can actually cost you money in the long run.
To keep tabs on your business cash flow, establish separate bank accounts and credit cards for your personal accounts and business accounts. Keeping your accounts separate may help you increase your bottom line, since once the accounts are untangled, you’ll be better able to identify the places to cut back and save. Read the fine print closely when choosing a bank, as many give some type of monetary incentive, which is a nice bonus.
One of the other ways for small businesses to save money is to invest in a small business credit card, which can help raise your credit score and save you money in other areas (such as procuring loans).
If you notice that you have recurring monthly costs that, given your business cash flow, you can pay off in full each month, then use a small business credit card to make purchases that can reflect well on your credit score.
Our partner, Found, can help you set up a business bank account and get you started with a little extra cash as well.
Found streamlines banking, bookkeeping, and tax tracking, you can focus on what you love.
Get $100*
Receive $100 when you open a new Found account and deposit $1,500. Terms apply.
Offer must be redeemed within 30 days of account creation, which expires 12/31/25. Found is a financial technology company, not a bank. Banking services are provided by Piermont Bank (a Hybrid Bank), Member FDIC.
3. Go green to save green
The phrase “Save green by going green” may be a bit tired, but it’s often how small businesses can save money. Taking note of how much energy you and your business use in different capacities (electric, gas, etc.) is a smart way to get a benchmark for where you can cut back on usage. Where there’s higher usage, there’s a higher bill.
If you’d like to have an energy audit, you can use programs such as Energy Star,1 which is owned and run by the Environmental Protection Agency. By going paperless and operating most of your business online, you can save money on paper, ink, toner, etc., and put that money toward your other business needs.
As one of the more sustainable cost-saving initiatives, the added bonus of your environmental efforts is that they could be attractive to prospective customers. Don’t be afraid to use your marketing materials to share what you’re doing to help reduce your business’s carbon footprint.
4. Invest in managing your time
How much is your time worth per hour? Saving money seems simple, but we rarely think of saving time. When you’re looking for innovative cost-saving ideas, remember the old adage: “Time is money.”
We recommend doing an audit of how you’re spending your time and how productive you and your teammates are throughout the day. Are you spending time in meetings with people whose time could be better spent on other activities instead of attending a meeting?
5. Buy/sell used equipment
Take a look at your business office space. Many of the tools and appliances you require to run your small business can be costly. Instead of spending money on new products, you can be more cost-savvy by buying second-hand products.
As long as they work and get the job done, there’s no shame in saving money by using a tool that was owned by someone else.
6. Consider outsourcing
It sounds counter-intuitive to suggest that outsourcing work can be one of the ways for small businesses to save money. After all, outsourcing work takes money.
But let’s revisit the calculations we did earlier on with the hourly rate of employees who can better manage their time. There comes a point where both you and your employees’ time needs to be allocated toward more pressing projects. So why don’t you hire a contractor who can take care of certain tasks while you run the business and do your job?
For example, you could pay a contractor $500 for a job they can complete in one day, then you wouldn’t have to break the work up into several days.
Of course, the way you hire contractors and outsource them will depend on your insurance coverage. Does your policy cover liability for someone other than yourself? Make sure to look into that before outsourcing.
Consider artificial outsourcing
The increase in artificial intelligence (AI) tools is another way you can get some of the benefits of outsourcing while spending less money. Whether it’s scheduling, estimating, invoicing, marketing, or a host of other business-related tasks, using AI can help you save time, which often means saving money.
Our series on using AI tools for specific types of business is worth a read. Even if your business isn’t highlighted in one of the articles, we still think there’s valuable information you could use.
- How AI Can Help Your Plumbing Business
- How You Can Use AI for Your Handyman Business
- How AI Can Help Your Beauty Business
- How AI Can Help Your Videography Business
Looking to Save on Insurance?
Every dollar spent counts at the end of the day, that includes what you spend on insurance. Insurance cost is based on a number of factors, including your revenue, employee headcount, and claims history. Factors like those can often change from year to year, so it’s worth reviewing your coverage on a regular basis. We have some helpful information on how to do that in this article.
You also can spend just a few minutes with our online quote tool and see if you might be paying too much for business insurance right now. And we have licensed agents on the phone who can answer questions about your current coverage or what coverage you may need. They’re available Monday-Friday, 8 a.m. to 6 p.m. at 855-869-5183.
Get Insured in Under 10 Minutes
Get an affordable and customized policy in just minutes. So you can get back to what matters: Your business.
More Valuable Tips for Your Business
Knowing how to save money is one way to help your business thrive. And here’s another tip: Visit our online Resource Center, where you’ll find free tools, guides, templates, and more — all designed to help small business owners like you.
Here are three we recommend to get you started:
- How Does Inflation Affect Small Business?
- How to Inform Your Customers of a Price Increase without Losing Them
- Accounting for Small Business: 5 Tips for Creating a Business Budget
References:
- https://www.energystar.gov/ ↩︎