On the lookout to lower your business’s monthly expenses? Here are nine ways to save.
The most essential reason for starting a business is to make profits. To make this happen, a company must be able to function with minimal costs.
While cutting costs is essential, only cut back in a way that will not be detrimental to your business operations.
There are various methods of cutting costs; you should select what best suits your company’s structure.
Statistics reveal that 7 in 10 firms fail, and cash flow undoubtedly plays a huge part in one’s success or downfall. However creative, hardworking, and smart you are, if money is scarce, there is no way your company can grow. Many small business owners find themselves in the same vessel: chasing investors, believing that’s the only way they can get additional cash for office notebooks, furniture, or other necessary items for their small business.
Perhaps one of the biggest mistakes business owners earn at the start isn’t using the ideal money-saving strategies.
Here are five ways you can cut business costs without hiring unqualified workers or making risky moves.
- Utilize open-source software
A lot of companies invest in expensive software that may be easily replaced by free apps. For instance, the Microsoft Office package begins at $499 for expert use on one computer. Multiply this by 10, and you’ve got a hefty bill to pay just for one piece of software.
On the other hand, Google Docs, Sheets, and Slides have most of the features which Microsoft Office offers — for free. Some software can’t be replaced with free software, but if you are having a rough month and also can’t afford to pay the monthly subscription for your software, there’s a solution for you as well. You can download trial versions of several software programs at Softpedia.
- Downsize your office space
Downsizing your workspace is not fun, particularly if you have plenty of documents and files to store. A smaller office area does not have to be a permanent solution, though, and even if it is, you can free up some space in your office by storing furniture or documents in a business storage unit. Another choice is to use flying shelves instead of chunky cabinets to maximize the space available.
- Hire remote freelancers
Perhaps the biggest money-saver is hiring freelancers for remote work. If your workers can do the same job that they perform in an office from the comfort of their own homes, why would you pay for office rent, furniture, and utilities? The biggest winners will be the company owners that cut a huge portion of their expenses rather than investing in the office area.
Despite common belief, you can keep your workers motivated without meeting face to face every day. There are loads of free programs out there that can help you set up weekly meetings. If you aren’t into fancy software and need to keep things easy, you can just use Skype.
- Hold your workers accountable
Many of us are guilty of the one: We’re often busy but not productive. Your employees aren’t any different, and they undergo lots of the very same struggles. Focusing on a single thing for eight hours every day, every day is not an easy task.
A popular opinion today is that the eight-hour workday makes sense only if you work on an assembly line, not if you do intellectual work. As opposed to needing your freelancers or employees to operate eight hours each day, counsel them to track their productivity and work out how many hours they concentrate on a single task. Often, workers can remain focused and accomplish the same amount of work in less time.
Further, there are lots of apps, such as employee monitoring software, which could help you monitor where your workers go online, how much time they spend on particular sites, and how long they spend working out.
- Rethink your marketing strategies.
Small companies and startups can’t replicate what bigger players do to market their services and products. When you are concerned about how you’ll pay the bills this month, then it might not be possible to invest in branding and outbound marketing tactics which may take months to yield returns.
Instead of putting your money in advertising, take a more straightforward approach: Advertise your services on websites like Craigslist. Ask friends and family if they need your help or if they know somebody who does. Look for Facebook groups linked to your business and post in them. Facebook ads are also cheap in comparison with advertising on other social media platforms.
Moreover, for just a little bit of time and money, you can create a web site for your company on platforms such as WordPress or even Squarespace, where no coding skills are essential.
- Reduce production costs.
Sell leftover items such as metals, cardboards, and newspapers Instead of sending them for recycling. This will add to your business income flows.
Use the right space to conduct your company. Any unused area can be let out to other businesses.
Establish ways to monitor and measure the operational efficiency of this market, and use the results to identify areas where you can maximize available resources. Put in place a business framework that is indicative of your efficiency objectives, and provide rewards when targets are satisfied.
- Lower your banking and insurance expenses.
Compare the rates of various insurance providers and inquire about your insurance company to coincide with the cheapest rates. Consolidate your insurance coverage together with the firm offering the finest prices. (Remember that you aren’t duplicating insurance policies, as this will be an extra cost to your business.)
It is also essential to consolidate your bank account. This will lessen the bank fees you incur. Don’t take any debts that are not essential to your organization, and consult a financial advisor before taking on significant debts that you think are essential.
- Develop effective time management plans
Optimized time use lowers the cost of running a business. Make sure that tasks are done within the given time. When employees take longer than normal to accomplish a job, it cuts to the time they would use to execute other jobs. Set specific times for meetings in advance and stick to them.
- Use virtual technology
You can reduce business costs by working virtually whenever possible. For example, virtual meetings reduce travel expenditures and the need for office space. You can also centralize your file storage in Google Documents or other file management software as opposed to saving hard copies of paperwork. According to Gordon Tredgold, automation of business processes will also lead to cost reduction.