No matter what the size of your business, as an entrepreneur, you can save money by being smart about your business costs and expenses. There are direct and indirect ways in which you can reduce what you spend every month. Using a business credit card or investing in a much-needed office equipment upgrade, can break the bank if not planned properly. The same can go for not remembering to pay your taxes every quarter.
If you want your business to grow exceptionally and become profitable, there are two tactics you should focus on: increasing sales and saving money. Unfortunately, many companies only focus on the former and lose sight of the expense. However, cutting costs doesn’t mean sacrificing the customer experience, nor does you have to lay off employees to reduce overall costs. Here are some ways how entrepreneurs can save money on business costs.
How to reduce business costs
Consider telecommuting
More and more business are conducting their operations remotely and hiring freelancers or contractors. In this way, an entrepreneur doesn’t have to worry about renting a workspace or paying health insurance for its workers. To make employment attractive, you can spend some money on incentives such as paying a certain amount for home office’s equipment costs or annual retreat trips where your workers can meet and discuss the plan for the coming year.
Eliminate paper business costs
Going green is on the rise as more businesses try to cut business costs. Reducing paperwork for everyone will eliminate the clutter and time wasted printing the same documents you already have available on your computer. If you use tools such as Google Docs to share documents used by multiple people in the office, you will save a lot of money on printing costs. If you need a hard copy of a report, you can always print it for your records.
Use the internet for marketing
The Internet has endless opportunities to market and promote your business. If you haven’t jumped on the social media bandwagon, you are missing out on an excellent opportunity to put your business in front of millions of people. Even if you are not a social media expert, you can hire someone who can take care of that task for you. It will probably cost you less than not having social accounts to market your products or services.
Update your budget
Any size business needs to start with a budget to keep an eye on business costs. You need to update and review it regularly to make sure you are not overlooking anything significant. If you have been in business for a while, it is even more important to do so. Any time something important happens, for example, landing that big client, or when you reach a milestone, the budget should reflect those events.
Revaluate fixed business costs
Some business costs aren’t always set in stone, take benefits for example. Sure you don’t want to cut back on insurance costs but you could get the same benefits for cheaper through another provider. Shop around and see what other brokers might be able to offer. Depending on the size of your company this could end up saving you a ton of money. Here is an article that discuss mistakes to avoid.
Take advantage of word of mouth references
Word of mouth is still relevant and even more so for small businesses. Having one happy customer who boasts about your product or services can bring in additional business when he or she talks about you to people on their network. Even with technology, networking is still valid and an easy way how entrepreneurs can save money on business costs.
Buy secondhand equipment
Cutting back on expensive equipment business costs by purchasing refurbished office furniture and hardware, spending only what is essential software costs, and reducing the business credit card debt are other ways of reducing costs for entrepreneurs.
Negotiate with your suppliers to reduce business costs
Do not accept the first price a supplier gives you. Suppliers usually have leeway that you should use to save money, especially when purchasing a large number of products. Many suppliers are happy to negotiate so as not to lose regular customers. It doesn’t matter if it’s utility or office equipment, negotiate with a provider until you find a sum that works for both of you. In this way you can save several hundreds in business costs per month.
Use a provider to organize your business trips
If you or your employees go on business trips frequently, it would be wise to invest in a provider to organize your business trips . By creating a customized program that suits your business needs, you can reduce business costs, lower risk, and improve the travel experience. For example, you can easily manage, track and forecast your annual travel business costs. You can also implement a travel strategy to optimize your operations.
Enter into partnerships
Stop spending thousands of dollars a year on marketing. Rather enter into sustainable partnerships to reduce costs and increase your reach on sites like Facebook and TikTok . Strive for a marketing collaboration in an area that is related to your industry and that is mutually beneficial.
For example, if you run a health food brand, you could partner with a reputable nutritionist, gym brand, or hospital. Cross-promoting products can increase brand engagement and help you reach a larger audience without detracting from your company’s sales. However, you should choose brands for cooperation that not only offer a similar quality, but can also complement your company’s values and image.
Welcome interns to the company
Interns are a great way to reduce your company’s annual expenses. Since your company doesn’t have to pay for salaries and benefits, interns are an effective way to save significant sums all year round without sacrificing productivity.
In addition, you offer intelligent, passionate and hardworking young people the opportunity to gain experience in your industry. You also give young people the opportunity to become rising stars in your company and increase its profitability.
Buy used equipment to cut business costs
When money is a little tight, it is worth considering carefully where to buy your equipment. For example, buying used equipment instead of new ones can save you a lot of money. While they might not be as shiny as new devices, most used computers, smartphones, and laptops can work just as well as brand new devices. This can save you thousands of dollars on office equipment in the long run, which can increase your company’s profit margin and improve its financial security.
Conclusion on business costs
Just like with personal finances, there is always an expense or cost you can eliminate to make your business more cash efficient and save you money. It is crucial to review your business plan and budget regularly, so you know how much is coming in and going out at any given time. Saving money is a must for any business. If you’re not entirely sure how to save costs, try the methods above.
