5 Cost-Saving Tips for SMB Merchants

We’re in the mood for some spring cleaning. While dusting off retail shelves is important, cleaning up expenses and tidying up inefficiencies can be a powerful way for merchants to save money. Here are five money-saving strategies for small businesses that can be implemented today: 

1. Improve your processes

Unnecessary costs and inefficiencies can be hiding in small business processes. The best way to find them is to audit the work done on a daily, weekly and monthly basis, and ask yourself, “Is there a better, cheaper, faster way we can do this?”  

• Focus on your supply chain process, which encompasses every step of the operations from sourcing and manufacturing to shipping and logistics. Within that supply chain, savings can be found by limiting excess inventory and storage costs, or by consolidating spend under fewer suppliers for greater negotiating power and stronger relationships. 
• Embrace technology to speed up processes, increase efficiency, and save money. Accounting software, for example, can reduce manual data entry and other repetitive tasks for faster, more accurate invoicing, payroll and expense tracking. 
• Don’t be afraid to ask for help. Involve your employees and your customers to find creative solutions. 

2. Optimize your workforce 

As you look at your processes, you’ll likely find new tasks that need to be completed to make your business better. Rather than hiring new employees, small businesses can save money by cross-training existing team members to take on these roles. It’s a great way to make employees feel valued, while you build a flexible team that can adapt to the changing needs of your business.  

Cross-training can help you avoid the costly expense of employee turnover in the future. According to this study, ‘onboarding a new hire can reach 50-60% of an employee’s annual salary in contrast to retraining an existing team member.’  

At the same time, if you are currently managing tasks in-house that are not core to your organization’s mission, you may consider outsourcing this work to save money while still getting the expert help you need.  

3. Evaluate your advertising and marketing 

Traditional advertising like television, radio, or print ads can be expensive. Capitalize on community-driven and digital marketing to save costs with maximum reach: 

• Explore social media ads and/or build up a social community through a regular social media post schedule  
• Build up an email marketing list  
• Heed search engine optimization (SEO) best-practices   
• Participate in tradeshows, public markets, or other events 
• Creating buzz for your brand through local media interviews 

4. Sit down with suppliers  

Of course, one of the best small business cost reduction strategies is to sit down with your suppliers and renegotiate your terms. If asking for discounts hasn’t worked in the past, consider other creative tactics, such as:  

• Research competitor pricing and ask your supplier to meet or beat that price 
• Ask for complimentary upgrades, better payment terms, or free product/services 
• Renegotiate for longer-term commitments in exchange for better pricing 
• Explore opportunities to buy the materials you need direct from the manufacturer 

5. Surcharge to recoup costs 

Surcharging can help save on business expenses when merchants pass credit card transaction fees on to their customers. If credit card payments make up a high percentage of your sales, surcharging can save you a significant amount of money, which can be reinvested into more critical areas of your business.   

Worldpay’s Fee Assist program can help reduce processing costs and keep your business compliant through every surcharged transaction. Not only does our solution verify card numbers, it also calculates surcharges and sends the totals to the terminal for cardholder approval. Most importantly, the Worldpay team of payment experts is here to help you every step of the way.  For more cost-saving ideas this spring, contact your Worldpay representative today or reach out to us to find out more.   

_{*AARP Employer Resource Center: Age-Inclusive Learning & Development Approaches, July 29, 2021}