Cutting back on costs in your small business and developing processes to reduce overheads in the long-run need not be a time-consuming job or even one which requires much effort. In most cases, it boils down to making smarter choices when putting your small business working capital to use.
From utilising technology to going completely paperless, there are numerous methods in cutting your overheads without feeling too much of a pinch, let’s explore ten of them:
Technology today allows business owners to save money and advance their businesses in ways that were not possible even 1 decade ago. From video conferencing applications to online payment solutions, open-source software, and online business services, there are many ways in which you can reduce your operational costs with a focus on streamlining your processes with technology.
2. Ditch the landline.
Today traditional landlines can be an expensive and sometimes unnecessary cost for small business owners. We advise small business owners to instead use their smartphones, VoIP (Voice over IP), and virtual calling services such as Skype to reduce business costs associated with communication with teams, existing or new customers.
3. Going paperless
The costs of paper, ink, postage supplies and postage might seem like a petty cash scenario, but over time it can add up to be a notable business expense. Small business owners need to consider going paperless in this digital age by only printing when absolutely necessary, and pivoting to digital invoicing methods and/or billing systems. Filing all necessary paperwork on the cloud or your business computers can drastically help you reduce many of the prevalent costs of doing business.
4. Focus on digital or internet marketing.
If you haven’t already, you should jump on the internet marketing bandwagon. By failing to go digital with your marketing, your business is missing out on the benefits of fast-paced, high-result and low-cost marketing methods. Consider implementing a business blog on your website, social media marketing, or any of the many other online advertising options out there, and you’ll see the potential of relatively quick brand response with minimal to no business costs. (posting organic, un-promoted and informative content on social media)
5. Reduce your credit card debt.
You could opt to reduce your immediate business costs by charging certain expenses to your credit card. However, with today’s interest rates and fees, it might not actually be an effective means to reduce costs in the long-run. That being said, an overall reduction in credit card debt is no quick or easy feat in lowering business costs; however, it is a wise decision if you’re to ensure that your business is financially stable in the long-run.
6. Creating and adhering to a strict business budget.
Effective budgeting goes hand-in-hand with your efforts in reducing business costs as it’s impossible to make, smart financial decisions without a clear idea of the money going in and out of your business monthly. Having a substantial business budget which you refer to daily can become an excellent and powerful tool in reducing your business costs more effectively.
7. Considering an alternative place of business.
The expenses which are incurred with renting or owning a physical business HQ can be immense, and of course, in many cases, dependant on a business’s sector is unavoidable. However, if you are in a position where this can change, you might be able to reduce your business costs drastically. By downsizing your retail location, considering a co-working environment or perhaps pivoting your business to a home-based company and implementing telecommunication systems for your employees.
8. Cutting back on software costs.
How many applications does your business use daily? There are more than likely many applications on your computer right now, which you rarely or never use. You can reduce business costs by only purchasing software which you absolutely need for your specific business needs. We also advise considering open-source software alternatives as opposed to brand name applications to reduce your operational costs.
9. Purchasing refurbished equipment.
Purchasing brand new retail-price equipment for your business carries a massive cost. However, these costs can be reduced, by purchasing refurbished furniture and equipment, which in many cases is as good as brand new items. Often manufacturers and re-distributors offer these products at a massively reduced price. You could even visit auction sites, where often you’ll find equipment for sale which can be bought at vastly lower prices, even in the setting of an auction.
The age-old notion of bartering refers to the exchange of your goods or services for other products and services your business might need without the need of cash changing hands. When you reach a successful bartering arrangement, you can reduce your business costs by avoiding any potential initial outlay of funds required to fill an immediate business need.
Each of these ten tips to reduce your business costs focuses on making alternative decisions which can help you save money. If you’re able to adopt a “business cost-friendly” ethos, it will help you reduce your business costs every day. Many of these “financial-savvy”, smart decisions will become a reflex, and over time, might even work their way into every business decision you make during your business’s lifecycle.