Whether you own a small business or a multi-million dollar corporation, your goal is often to make more money than you already have. However, there is a problem; most businesses, especially small businesses, unknowingly waste money. According to a report by Business Insider, approximately 82 percent of all companies fail within three years of inception because of poor cash flow management and high business costs. Fortunately, there are numerous ways to cut business costs and take your company to new heights of success.
For example, an easy way to save money on marketing costs is to hire a professional marketing firm. However, suppose you automate in-house marketing efforts. In that case, you probably won’t have to hire a marketing team in the first place. Cutting down business costs is all about making the right, most effective business decisions. Furthermore, it is also about developing optimal business processes that allow you to decrease the amount of money and time you spend on your work. With that in mind, listed below are a few ways you can cut down business costs and improve your bottom line.
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Work online and leverage coworking spaces
If your business doesn’t need an actual physical storefront or you’re operating an online company, then stay away from renting a place or purchasing one altogether. This approach will save a lot of pretty pennies on repair costs, utility bills, transportation costs, maintenance costs, and other expenses associated with a brick-and-mortar office/shop.
Instead, consider running your business operations online, renting a shared workspace, and leveraging the same benefits that come with owning a building. These include a registered phone number, address, and P.O Box number. For instance, if you’re operating an online business from Hong Kong, Google ‘coworking space in Hong Kong‘ to locate shared office spaces that provide the best amenities. This way, you won’t have to incur substantial long-term costs that come with owning and managing your area.
Consider hiring freelancers instead of full-time employees
Consider asking yourself whether hiring a full-time graphic designer, content manager, SEO executive, or web developer is better than building a team of freelancers. Chances are you probably need these professionals on a day-to-day basis to ensure smooth business operations. And we all know that one less full-time employee means one less individual to pay. So, if you want to save some money on employee hiring and per-head costs, opting for freelance services will be your best bet.
However, hiring freelancers doesn’t mean you hire the cheapest individuals you can find. If you do that, be prepared to experience sub-par work. While hiring a high-quality freelancer isn’t cheap, you will probably still avoid the cost of failure by contracting cheap resources over and over again.
Adopt a paperless approach
Sure, postage charges, stationery costs, and other office supplies expenses won’t be that high to burn a hole through your wallet. However, if you keep purchasing office supplies now and then, costs could pile up and turn into something disastrous. So, consider ditching the old pen and paper working method and going with a more digital approach. Scan all your paper-based documents and turn them into digital files on your computer. You can even access them via your smartphone.
Moreover, adopting digital invoices and bill payments will enable you to keep records of everything on your smartphone/computer. Such a paperless approach will reduce the amount of printing needed to hand out invoices and bills to customers, allowing you to save money or printing costs. Not to mention, you probably won’t have to deal with piles of paper gathering inside your office space and the need to rent t extra storage space for archives.
Save money on electricity expenses
When discussing workspace electricity utilization, ensure you incorporate fair usage policies to avoid overuse, quickly leading to towering energy bills. Consider asking your workforce to unplug unused devices, switch off extra lights, and switch to energy-efficient products to cut down on your bills.
Furthermore, consider contracting an energy expert to perform an energy audit on your electrical systems. Doing such a thing will enable you to understand your business’s average energy usage. A few other electricity savings tips include using alternative energy like solar or wind power, installing energy-efficient LED lights around your business premises, and replacing your heating and cooling systems air filters.
Buy used business equipment
Purchasing new business equipment and for the retail price will cost you a pretty penny. However, you can altogether avoid paying extra for business equipment by opting for second-hand, refurbished options. For instance, if you want to replace the photocopier in your office, consider buying a reconditioned one instead of a new one to shave off a few bucks.
Furthermore, go for second-hand office furniture from your local thrift store or ‘going out of business’ sales to save money on office furnishings. All these second hands office chairs and tables need is some TLC and a reupholstery job, and you’ll be good to go.
Create a budget
Whether you’re a veteran business owner or recently started an online business, developing a budget is crucial for cutting down business costs. However, you probably won’t make well-informed decisions if you haven’t created a budget. A proper financial plan contains everything from financial forecasts to expansion opportunities to profit and loss statements to everything in between.
So, a solid budget is crucial to ensuring that you keep updated with your business’s financial health more often than not. Furthermore, go for a ‘working budget’ to track, monitor, and utilize your budget more effectively. This lean budget functions as a work in progress and usually changes as your business changes.
Conclusion
If you don’t cut down on unnecessary business costs, you’ll end up running dry in a matter of years. This article mentions a few ways you can keep your operating expenses low. These include working online, leveraging coworking spaces, cutting down n energy usage, using second-hand equipment, and creating a proper budget. By following these tips, you can manage your cash flow better while keeping your day-to-day expenses low.
