Whether you are just starting your business or you're 20 years in, cutting business expenses can go a long way in helping you become profitable.
When you only look at the biggest costs to your company, the task can seem overwhelming. But the places where you can really pinch pennies are often overlooked and undervalued.
1. Go paperless.
This one is really a no-brainer, but you'd be surprised by how many companies don't consider it as part of their expense management.
The amount of money you're spending on paper, printer ink and shipping could be reduced by going paperless. To help you cut these business expenses, consider sending emails or faxes in the place of letters whenever you can. Not only can it help declutter the lives of everyone involved, it's also more sustainable. Individuals who interact with your company may even be impressed by your efforts to reduce your carbon footprint.
2. Move your business to the cloud.
If your company is spending an ample amount on hardware—IT and servers for data backup—switching to cloud computing could help you cut costs.
The financial investment—let alone the physical space—necessary for a computer system large enough for the entire office could cost a small fortune. There are a number of cloud services you could utilize, including OneDrive and Dropbox Business. By combining cloud-based services, you could eliminate the need for physical data storage devices.
3. Buy the products you need in bulk.
Buying in bulk can be a tricky game, but, when executed well, it can lead to rewards.
If your company consistently burns through one resource, such as merchandise, you could lower your costs by purchasing it in bulk for a lower price.
With this cost-cutting strategy, the one mistake to avoid is making too large a purchase and inevitably throwing away whatever goods you don't use. The key is to pay attention to the amount you consume monthly or annually. If the bulk price proves cheaper, you could end up saving your company money.
4. Rethink your office space.
Especially when you're just taking off, a large office space can be an unnecessary business expense. There are three alternatives that can help you dramatically cut your capital expenditures:
Go virtual. If your company operates in a way that doesn't require face-to-face contact, you could save a tremendous amount by having employees work from home.
Join someone else's space. Try finding spaces that already have tenants committed to long leases. There is a chance you could pick it up on the cheap if they have extra space. In my personal case, I got the space for free.
Go in for half. If you can find find another small company looking for office space, consider splitting the rent and sharing an office. This can be particularly effective if your businesses complement each other. For example, a trucking company could provide discounted services to a home furnishings business.
5. Pool your resources with another business.
This cost-cutting strategy takes some effort, but the savings can be hard to ignore. Try to contact other businesses in your industry that buy from the same suppliers you do. Using your collective purchasing power, inform the suppliers that you will all buy from the vendor who offers the best discount.
You would then agree to work exclusively with the vendor for a period of time, minimally three years. Each business can maintain its regular order size and pay independently, but for a better price, making business expenses a little lower.
6. Travel less and use free meeting technology tools more.
We may not have flying cars or teleportation, but modern technology does make it easier for us to be in two places at once. Instead of spending money on expensive plane tickets and hotel rooms, take advantage of free resources like Skype and Webex wherever possible. You could cut costs and lower your carbon footprint by opting out of monthly business trips.
While you may not be able to give up traveling entirely, free web conferencing and video calls can save you time and money that could be reinvested into your business.
7. Hire part-time workers.
By exclusively hiring full-time employees, you could be overlooking the advantages of part-time workers. There is an entire labor pool of talent filled with hardworking and talented individuals seeking part-time work. Not only could this lower your company's labor costs, but it can provide you flexibility in hiring and letting go of employees as you need them.
Also consider reaching out to local colleges to recruit interns in exchange for minimum wage pay. There is the option of offering course credit to your interns instead of pay, but only if your internship program meets the U.S. Department of Labor's stringent qualifications.
8. Cut telephone costs by using online services.
Telephone systems are expensive. Really expensive. But you could save tons of money by simply combining a few free or cheap online services.
With Skype creating a premium business phone for less than $3 a month, Free Conferencing providing free conference call services and Grasshopper offering a virtual phone system for an unlimited number of employees, telephone systems are no longer the only option.
9. Ask your team for their thoughts on ways to cut business expenses.
One of the most overlooked methods of radically cutting costs, without compromising the business in any way, is to seek guidance from your team. Try sitting down with your employees and informing them of your current cost-cutting methods. Ask them to bring their own suggestions for business expenses to drop.
One real-world example was an employee proposing that everyone bring in coffee mugs to replace disposable cups. The company was able to save $100 a month as a result. You could, too.
10. Find opportunities for your business to get free advertising.
If your company is spending money on its advertising without taking advantage of free advertising opportunities, you could be making a mistake.
There are a number of strategies you can take advantage of right now to help increase your audience. First, and possibly the most obvious, is social media. But not just regular social media accounts. Check out Instagram for Business, which allows you to view the insights on each post, covering everything from peak activity hours to the number of impressions made. You can also promote popular posts for a low cost so they become automatic advertisements.
Also consider joining an online community relating to your industry. If you're looking to attract new clients, going straight to the source can initiate a potential customer relationship. A lot of the time, the individuals turning to message boards or online communities are seeking direct help or more connections within your industry. This could be the perfect location for you to present your company.
On the road to being profitable, using creative shortcuts to cut unnecessary business expenses can be a key to success. By thinking out of the box and implementing these strategies, you could save your company hundreds—or even thousands—annually.
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