December 2023 - Alliance to Save the American Dream

Six ways for small businesses to save big on software.

December 21, 2023 - Emeka Anammah

As a small business, you likely want to employ cost-saving measures wherever possible. One avenue that small businesses are currently exploring to boost their bottom line is cutting costs on software. A recent CNBC article reports a trend of mom-and-pop shops and small businesses such as Joe Coffee reducing software spending. These businesses are more closely scrutinizing what platforms they pay for and where they can lighten their expenses. Let’s look into some small business strategies you can employ to save big on software while still maintaining efficiency and competitiveness.

  1. Audit and Assess Software Needs:

The first step in cutting software costs is thoroughly auditing your existing software tools. Evaluate the usage, functionality, and necessity of each application. Identify redundant or underutilized software that can be streamlined or replaced with more cost-effective alternatives. For example, if you only occasionally add content to your brand’s blog, having a recurring spelling error software may not be necessary at this time.

  1. Explore Open Source and Free Software:

Small businesses often overlook the wealth of open-source and free software available. Platforms like Linux operating systems, LibreOffice for office productivity, and GIMP for image editing can provide robust alternatives to their costly counterparts. If you need to keep your costs low, adopting open-source solutions can significantly reduce licensing fees without over-compromising functionality.

  1. Cloud-Based Solutions:

Embracing cloud-based solutions can be a game-changer if you are trying to lower software expenses. Cloud services often offer subscription-based models, allowing businesses to pay only for the resources they use. For example, the cloud-based solution Dropbox offers three tiers: Plus, Essential, and Business. This model eliminates the inclusion of unnecessary features, reducing maintenance costs and making it an attractive option if you are a cost-conscious business owner. Don’t always assume you need the most advanced Business subscription, when more affordable options might more aptly suit your needs.

  1. Negotiate with Vendors:

Engaging in open and transparent communication with software vendors can lead to cost reductions. Negotiate for better subscription rates, discounts, or extended payment terms. Vendors are often willing to work with loyal customers to ensure their satisfaction and continued partnership. Negotiating rates and functionality needs with your vendors can help you maintain essential software while saving money.

  1. Embrace Free Trials and Freemium Models:

Before committing to a full-scale software investment, leverage free trials and ‘freemium’ models. Many software providers offer limited versions of their products for free or trial periods. Testing out software allows your business to gauge the software’s compatibility and effectiveness before making a financial commitment.

  1. Consolidate Software Platforms:

Consider consolidating software platforms to streamline operations and reduce costs. For instance, CRMs such as Hubspot have many marketing functionalities on a single platform, which is also ideal for tracking and managing online efforts. Opting for integrated solutions that cover multiple business functions can eliminate the need for several specialized tools. Consolidation simplifies your workflow and reduces your overall expenditure on software licenses.

If your business faces financial constraints, utilize these strategic software cost-cutting measures to ensure sustainability and competitiveness. Carefully assessing needs, exploring cost-effective alternatives, negotiating with vendors, and embracing modern solutions, can effectively leverage your budget constraints with operational efficiency. As small businesses make waves on Wall Street through prudent software spending, the message is clear – with a flood of new platforms, optimizing software expenses is a crucial step toward long-term success in the small business arena.

The Alliance to Save the American Dream is a non-profit organization dedicated to three core goals.

1. Develop an Ideas Factory to give small businesses and industries a centralized place to share innovative ideas that must be considered.

2. Build a unique Resources portal for small businesses to go to for answers or resources that address a wide range of issues or challenges.

3. Offer a new networking opportunity for small business owners to connect while also giving them a platform to share their own personal stories. For more information, visit savetheamericandream.


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