Image source: https://www.flickr.com/photos/gotcredit/29689639653
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.
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.
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.
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become obsolete or outdated quickly, is difficult to resell, or requires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.
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…
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
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.
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.
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.