Clever cost-cutting strategies for your business

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Every business is under pressure to do more with fewer resources these days but knowing where to cut costs without compromising the growth of your business is not always easy. While the right strategy will be unique for every business, we take a look at a few clever strategies to get you started.

Embrace remote work

Allowing more of your staff – especially those in non-client-facing or administrative roles – can be a win-win for both you and your employees. Aside from helping you reduce your costs (on everything from electricity and internet usage to kitchen supplies), embracing remote work has been shown to have a positive effect on employee morale and productivity. And yes, while it might take a little time to get used to hitting the Skype button rather than yelling across the office when you need something, the potential benefits should not be ignored. If the model works well for your company, you may even be able to downsize permanently to smaller, more affordable office space in time.

Take an aggressive approach to tackling your debt

Just as with your personal finances, being in debt costs you a lot of money. And while the right kind of debt can certainly help you grow your business, getting out from under it as quickly as possible is one of the best ways to reduce your recurring expenses and free up cash to invest in profitable avenues. Focus on paying off high-interest debts first or look into refinancing if you’re juggling several monthly payments. For businesses, credit card debt is particularly troublesome, and worth eliminating as quickly as you can.

Know when to hire rather than purchase

While investing in an asset you own outright might look like a solid plan on paper, it’s not always the right strategy financially. This is particular true for equipment which tends to become obsolete or outdated quickly, is difficult to resell, or requires specialized maintenance. In these cases, tech rentals which allow you to upgrade to newer models when you need them, and include maintenance and support services, may well work out significantly cheaper than purchasing.

When you do buy, consider “pre-loved” goods

For items that don’t have a short lifespan (hopefully, at least!) like office furniture and delivery vehicles, the difference in price between a new and secondhand product can be staggering. If you take the time to look, you can find some real treasures that no-one would guess weren’t straight off the production line. As an added bonus, it also reduces your impact on the environment. Speaking of which…

Go green

Implementing a green initiative at the office isn’t just good news for your pocket and the planet, it’s great for your brand image too. Share your efforts on social media and ask your followers for their stories or recommendations to boost engagement and get some free online marketing juice too.   

Partner with other local companies to buy in bulk

If your premises is located in a business park or office block which you share with other companies, getting to know your neighbors and partner with them to buy common consumables in bulk can be a great way to reduce everyone’s costs. From stationery and kitchen supplies to cleaning services, combining your purchasing power can result in big savings.  

Make use of free online marketing opportunities

There are so many free ways to boost your company’s online presence and get more quality traffic coming through to your website. Aside from just posting every now and then on social media, implement a proper strategy. Make use of your expertise to answer questions on sites like Quora and Yahoo Answers, or specialized industry forums. Put together great content for your blog, ask your happy customers for testimonials or reviews on your Google My Business page, and offer to be interviewed by leading websites in your field.

Ditch low-profit product lines or services

Do you know which of your products or services bring in the least (and the most revenue) for what it costs you to offer them? Doing at least a basic profitability analysis on all the lines you offer is a great technique to identify the areas you should be trying to boost sales in, and which you might be better off letting go.  While it’s never fun to discontinue a product or service, freeing up your resources and your employees’ time to focus on your most profitable lines can be massively beneficial for your business.      

Other avenues to explore might be looking at the costs of outsourcing some of your non-core functions as opposed to hiring a fulltime employee, researching more cost-effective insurance, banking, or internet providers, or simply asking your long-term suppliers for a loyalty discount. Once you’ve got your thinking cap on, the opportunities for reducing your expenses will suddenly start showing up all over the place.