Businesses, be it large or small, want to make money no matter what happens. However, there is a catch; most new and small businesses out there are unintentionally wasting a ton of money. In fact, according to a Business Insider report, 82 percent of all companies fail within three years due to cash-flow problems.
That said, an easy method to cut business costs is to differentiate the unnecessary from the necessary. For instance, if you’ve hired a social media marketing team and paid them a ton of money, but their work has allowed your business to have a solid online presence, then that is something necessary.
But, if you’ve automated a particular business operation, but it isn’t reducing employee workload, then it must go.
In the end, creating healthy business processes while reducing operational costs doesn’t require too much time and effort. In fact, it is all about making the right business decisions.
So, with that in mind, let us look at a few ways businesses can cut down costs and save money.
Select a Suitable Business Location
If you’re running an online business or your company doesn’t require a physical brick and mortar location, then don’t rent or purchase one at all. Doing so will allow you to save a ton of money on utility payments, maintenance and repair costs, transportation costs, and anything else that goes into running and maintaining a physical location.
Instead, consider working from home or taking your operations online via various collaboration applications such as Trello, Podio, and much more.
Furthermore, if you want to meet new people through networking or hold meetings with your staff, renting space at the Executive Centre is an excellent option.
It is a premium event space rental solution that offers pre-furnished event spaces tailored to all business requirements.
Purchase Used Equipment
Retail price, brand new business equipment will incur you’re a massive cost. However, it is something that you, as a new business owner, can easily avoid. So, purchase second-hand, refurbished equipment and furniture because it will be as good as their brand new counterparts.
For instance, purchase refurbished items such as laptops, office chairs, and desks from either your local thrift stores or local garage sales.
That said, don’t forget that refurbishing doesn’t only mean purchasing second-hand furniture. It also involves painting, adding new seats, or reupholstering old furniture. In the end, those before and after furniture pictures you usually see on Pinterest only take some skill and patience to transform second-hand equipment into something that looks like it just came out of its box.
Develop and Follow a Solid Budget
Whether you’ve been in business for ten years or you’ve recently launched one, budgeting is a no-brainer when you’re looking to cut costs. But you won’t be able to make intelligent financial and accounting decisions if you don’t understand how much money goes out and comes into your business.
In this case, a solid budget plan will provide business owners with a daily view of their finances and how they can cut down unnecessary costs.
That said, the best way to achieve some savings is to create a working budget. The term ‘working budget’ means that your budget is a work in progress. As a business owner, you will view it once every day, follow it, and make necessary adjustments to reduce unnecessary costs.
Ditch The Landlines
There is no doubt that landlines are overrated; nobody uses them anymore. So if you’re still calling customers and receiving calls on a landline phone, consider ditching it for virtual phone lines, VoIP, or software to cut unnecessary business costs.
In fact, according to AT&T, they will stop providing landline coverage soon. Moreover, they’re ditching old technologies that their customers say they don’t need anymore and investing a ton of money into new communication technologies that will serve the customers better.
Sure, the cost of postage, mailing suppliers, ink, and paper is something you shouldn’t worry about. However, it can add up to massive amounts of money if you aren’t careful with office supplies purchase decisions.
That said, by ditching the traditional pen and paper, you can drastically decrease recurring office supplies costs that most businesses typically incur.
Furthermore, switching to digital bill payments and an invoicing system will allow you to record everything on your computer.
Doing so will reduce the need to print hard copies of payments slips, invoices, and receipts altogether, eliminating the hassle of dealing with piles of paperwork that only messes up the office space.
Hire Freelancers Whenever Possible
Ask yourself if it would be better to hire a full-time content writer, graphic designer, web developer, or freelance services. Maybe you only need such professionals for only a couple of months.
So, to save up on the costs of hiring full-time employees for particular roles, go for outsourcing and freelance services instead.
But, going with the cheapest freelance service might not be a wise decision. Doing so will lead to low-quality work. An experienced freelancer will cost more money upfront, but it is a one-time cost you will probably recoup when you don’t have to pay someone else to fix a low-quality freelancer’s mistakes.
Save on Electricity Costs
When it comes to office electricity usage, ensure you’re strict with your policies because electricity overuse can result in high energy bills, leading to increased business costs. So, ask your employees to use sunlight rooms, turn off extra lights, unplug unused electronics, and much more, to cut down electricity usage costs.
Furthermore, you must also contact your local electricity provider and ask them to run an energy audit on your business premises.
Doing so will allow you to learn the amount of energy your workplace is using. Some other energy-saving tips include using energy-efficient bulbs, replacing your HVAC system’s air filters, switching to alternative energy, and much more.
In the end, some business owners will say that it is impossible to cut down on costs, especially if you’re new to the business world. However, with the help of some proper planning and cost-saving tips, your business will operate more efficiently than it ever did in the past.
So, consider the tips mentioned above and incorporate them into your business practices today if you want to cut down costs as a new business.