10 Cost-cutting ideas to reduce business expenses now
While working to consistently increase sales is critical to business success, equally as important is cutting unnecessary expenses. The key to business growth and sustainability requires the right balance between both.
To jumpstart your cost-cutting efforts, the following list offers 10 sound tactics to help you reduce business expenses now.
Idea 1: Clean up your technology
With the constant release of new technologies, it’s not uncommon for business owners to lose track of the automation solutions they’ve purchased along the way. Make sure you have a clear picture of the apps that make up your technology ecosystem by conducting a thorough analysis. Once complete, cancel any subscriptions you’re no longer using and get rid of solutions that duplicate functionality (e.g., if you have two file management subscriptions).
Idea 2: Go paper-free
The costs associated with paper-driven processes may seem minimal—that is until you add up the expense of paper, ink, postage, and mailing supplies. Start by making the transition to a cloud-based invoicing and bill payment system to significantly reduce expenses associated with paper-heavy operations.
Idea 3: Analyze credit cards
If it’s been a while since you evaluated the credit cards used for your business, now is a good time. Dig deeper and research annual fees, interest rates, and late charge penalties. Also look into rewards programs to determine which cards best fit your needs (e.g., those that offer cash back or travel points).
Idea 4: Create a budget and stick with it
One of the most effective ways to reduce costs is to have a budget in place—and adhere to it. A well-planned budget serves as a powerful tool to monitor cash going in and out of your business. With a clear plan in place, it’s much easier to make smart, informed financial decisions.
Idea 5: Work remotely
Rent is typically the biggest line-item expense for most business owners. Today’s advanced technologies make it easier than ever to work from home or other cost-effective shared workspaces. Also consider that maintaining a brick-and-mortar office comes with added expenses such as utilities, cleaning, and other general maintenance fees.
Idea 6: Purchase refurbished equipment
You don’t always have to buy new, especially with so many options to purchase refurbished items like computers, monitors, and office furniture. Retail-priced goods are commonly a major business expense. Be sure to research refurbished options, which often prove as good as brand new and come at a reduced price.
Idea 7: Consider trading services
Like you, other small business owners are always looking for ways to reduce expenses. Service trades are a real thing and many businesses are open to it. For example, if you run a marketing agency and require design services, try trading your marketing expertise for graphic design work.
Idea 8: Evaluate benefits and outsourcing options
As the cost of healthcare and other employee-related benefits continues to rise, it’s important to evaluate your existing benefits package and identify more affordable options. For businesses that wish to work with a single source to handle all human resources functions, consider looking into a PEO (Professional Employer Organization). PEOs work with small businesses to help them manage payroll, HR tasks, healthcare benefits and more—and, typically, all at an affordable fee.
Idea 9: Review current vendors
Are you getting the best price from your current vendors? Do vendors proactively come to you with bulk discounts or promotional savings? Take the time to carefully analyze your existing vendors and identify alternatives to reduce costs. If you are in a niche market that has grown significantly since you opened your doors, you will likely find far more vendor options. You can also reach out to long-time vendors who value your business and ask to renegotiate contracts or for additional discounts.
Idea 10: Explore DIY
Not every task requires a high-priced vendor. In fact, there are numerous online resources available that enable you to do it yourself. For example, build your online store by using one of the many popular and easy-to-use ecommerce services (think Shopify, Etsy). Research DIY design sites where you can create custom marketing and sales materials. If you have unique talent within your existing staff, consider expanding an employee’s role to take on new and exciting tasks such as writing website copy or researching keywords to bolster SEO (Search Engine Optimization).
Reducing business expenses should be an ongoing task, not a periodic exercise. Staying on top of expenses (and cutting them where you can) is the best way to stay within budget, add to your bottom line, and ensure long-term financial success.