When you’re running a business, time and money are precious commodities. The management team is often stretched thin, and that can create all sorts of problems. When your primary focus is on day-to-day operations and growth, your budget, in particular, can easily suffer. Before you know it, you’re struggling, and your bottom line is affected. Then finances have to become your primary focus, often at the expense of day-to-day operations and growth. It's a vicious cycle that can be the ruin of any small business.
One way to prevent this from happening to you is to regularly look at ways to reduce your costs – without sacrificing the quality of your service or product – and make cost-saving adjustments and changes whenever possible.
10 Ways to Cut Business Costs
If it's been a while since you’ve visited your budget and expenditures, here are some places to start and reduce your business costs.
Modernize your marketing
Gone are the days where business cards, brochures, print, radio, and TV ads, and other expensive marketing materials shoud be your primary marketing tools. Online marketing has become a force to be reckoned with. And while effective marketing will always require a steady and sometimes substantial investment, digital marketing costs far less, especially if you get creative.
Make sure your online presence is strong: website, social media, inbound strategy. A great approach is to familiarize yourself with what digital marketing is, determine what you can handle in-house, and what outside services you may need. If you're technology savvy, you can do a lot of this yourself. Online tools and software give startups, and small to mid-sized businesses the ability to do a lot of marketing on their own.
Another option is digital marketing students who are eager to get hands-on experience. This is where internships can help your business reduce costs and get the modern marketing skills you'll need. If you choose to use professional services, compare pricing and quality to make the most of the money you do spend.
Check your utilities
Much like a homeowner, a business owner can reduce utility costs. Price shop for phone and internet plans. Install Smart thermostats and program them to optimize efficiency. Use passive energy-saving measures. Research any way you can reduce monthly utility costs.
Stop paper use wherever possible
Paper and printer ink can add up quickly. That said, there are endless software programs and online tools to go paperless. Things like DocuSign, Dropbox, or email marketing services, and more can help you cut costs. For any paper-intensive operation in your business, research to see if there is a paperless alternative.
Look for places your services have a gap
A lot of services or plans have a usage limitation or overabundance of features. A good example is bookkeeping. Let’s say you’re using QuickBooks: What if you only use a handful of the features you pay for monthly? Would it make sense to move to another plan that costs less? Another might be a service where you have plans that depend on the number of user licenses. Maybe you pay for 50-100 users, when only a max number of 30 people actively use whatever “service” it is. Downgrade to fit your actual usage. You'll find the savings to be substantial.
Each year assess any subscription plans you have. This can include legal, financial, cloud storage, etc. Anything that has capacity limits or levels of features should be looked at.
Not everything should be bought used, but you can save quite a bit looking around for recycled equipment, furniture, and even vehicles. There are a lot of excellent secondhand products available that have seen little use.
Employees cost money, and there are certainly core in-house roles and responsibilities you can’t go without. However, always look at roles you can outsource. Freelancers, contractors, and outsourcing companies are often specialists, and paying them for only what you need is a great way to cut costs and get expert work done.
Don’t be afraid to negotiate or trade
Very little is set in stone, and it never hurts to ask if a major service or product you are buying can be had for less, especially if you have several options. As far as trades, if two companies have something to offer each other, see what you can do to trade rather than pay.
Technology has allowed many offices to go virtual or home-based simply by providing networks, meeting tools, and other ways to be productive. If you can save by allowing telecommuting, give it serious consideration - particularly if your business doesn't require regular in-person visits from your customers.
Setting aside regular blocks of time to strategize on ways to increase productivity is essential to the effective operation of any business. Look at how to increase time management skills and create incentives for productivity.
Look closely at your loans
Businesses can fall into the same trap as consumers – multiple loans with high interest rates lead to excessive debt and what we call Loan Hell. Failure to effectively manage your loans and service your debt is one of the quickest ways to lose your business.
There are services, such as those we offer at Kenmore Capital, that can assess your loan situation and work with you to find a solution that reduces your costs. Whether it’s loan consolidation or restructuring, don’t let loans prevent you from profit or growth.
Running a business takes a lot of work and requires performing countless tasks with limited time and money. If you’re ready to cut costs and improve your budget and finances, take some of these steps today. Start by contacting Kenmore Capital to see how we can improve your loan situation.