Stop wasting money when you don’t need to! We share sure-fire ways that you can reduce business costs, and it’s easier than you think.
True or false: Business owners are in the habit of making money. True, of course!
But here’s the catch, far too many business owners are wasting money and outing their businesses at risk unnecessarily.
In fact, 82% of all businesses fail because of cash flow problems, reports Business Insider.
Reducing business costs and creating healthy processes that cost less over time doesn’t have to be time-consuming or take too much thought. It’s all just about making smart choices when reducing business costs.
In this blog, we share 8 easy ways that you can reduce business costs. Trust us, it isn’t as complicated as you think.
Use the right technology
Using technology whenever possible can help you save money and take your business forward.
- Hold meetings virtually using Zoom or Teams so you can save on petrol/gas money
- Use free online payment services, like PayPal or Venmo
- Google Docs or Trello are solutions that help organize and centralize your company documents, plus it’s a good tool to assist with project management
Rely on modern marketing methods
Eliminating paid advertising isn’t advised altogether but there are some cheaper alternatives that you should explore when looking to reduce business costs:
- Network! Customers are more likely to work with you because they recognize you so take on all the networking opportunities.
- Do more of your marketing work in-house instead of paying someone else. Sure, there are plenty of experts out there, but you can do some research online to find tips and guides that work for you.
- Boost your social media presence but choose the right platform for you such as Facebook, LinkedIn, Instagram, Twitter etc. Be sure to set a goal and create a strategy, as posting randomly will get you nowhere. Just ensure that you’re being genuine and really connect with your audience.
- Offer a referral program while building your customer email list. Recommendations from current customers can lead to sales more quickly.
- Ask current customers to write reviews, whether, on your website or social media channel, glowing customer reviews are golden!
- Remember that people trust online reviews almost as much as if they were to receive a recommendation from a friend or family member.
These modern methods really do work, however, to ensure you’re cutting business costs then you just need to try as many as possible to see what works and doesn’t work for you.
Sure, the price of paper, ink, mailing supplies, and postage is minimal, but it can add up to extraordinary amounts if you’re not careful.
By going paperless (unless printing is necessary), you can reduce these recurring business costs. Switch to a digital invoice and bill payment system like XERO or Quickbooks and you can file all paperwork on your computer. Once you print everything, you must deal with piles of paperwork that will only clutter up the office space!
Lower your financial expenditures
Take a close look at your insurance policies and financial accounts to reduce business expenses:
- Compare insurance providers to save money on insurance and then ask your current provider to match that rate.
- If possible, consolidate insurance policies or bank accounts.
- Evaluate insurance policies to check if you are being over-insured or have duplicating coverage.
- Avoid unnecessary debt. Conduct a thorough cost-benefit analysis and future forecasting looking into business expansion.
Consider opportunity costs and the effects that occur with debt payments on cash flow. Excess debt can strongly affect the company rating, interest rates, and borrowing in the future.
Time management cannot be overlooked
Time is money – isn’t that how the saying goes? So be sure to work productively without wasting time otherwise you’re just wasting money. And that’s the total opposite of reducing business costs.
- Minimize distractions with apps like Todist which can help you to focus by tracking sites that suck up your time so that you can stay on point.
- Toggl is an app that we use to track working hours, the time spent on work activities/projects, and shows billable hours. Not only does this show you how and where projects stand so you make smart business decisions, but it also ensures you have accurate timesheets when it’s time for payroll.
- Set expectations for how long an activity or task should take and offer an incentive if the expectation is met or takes even less time.
- Meetings should run on a predetermined block of time so everyone must show up on time, should stick to the agenda, and needs to wrap up at the appointed time.
- Avoid unnecessary meetings by having everyone send a meeting agenda so they can highlight what needs to be discussed. If you can answer most of their points in an email, then there is no need for a meeting. Plus, this allows you to show to the meeting with answers to what was raised instead of having to schedule a follow-up meeting.
If you don’t require a physical location for your business, then don’t buy or rent one. Look into working from home, shared workplaces, or each week or month, you can switch out which home you and your team work out of.
However, if a physical location is what you require then make the most of it. Analyse how much physical space you have because chances are you don’t need that much storage space. Consolidate different functions of your business, like having a space that is good for dual purposes. A meeting room could be a break room, for example.
Outsource when possible
Really consider if you need a full-time web developer, graphic designer, content writer, etc. Maybe you just need a few jobs a month? Offer part-time positions and be sure to outsource work for specialized tasks.
We hinted at this earlier but taking unnecessary trips will only eat up your time and will cause travel expenses to add up. Avoid this to reduce business costs by using online applications that offer quality video service, like Teams or Zoom. You can video conference, hold webinars, screen-share, and more.
Now, we know that due to COVID-19, traveling less is much easier than it was before and there are many businesses that are shifting to remote work when possible. So, if you’re going to be working from home, ensure that you’re working productively.