Are you running a small business? Is the current economic landscape taking its toll on your earnings? The outlook for small businesses in the United States is somewhat gloomy.
Over 100,000 small businesses already folded up because of the pandemic. And if your company is still standing, you need to keep it afloat by making smarter decisions.
One of the wisest moves to consider is cutting your business costs. This means reducing your overhead expenses to maximize your earnings.
This doesn’t only cover your business insurance cost or business license cost. This involves everything that makes your business operate.
But to pull this off, you don’t just stop spending on any area that you want. You must first identify the key areas where you can tweak your spending.
Continue reading below as we give you nine simple yet effective ways to reduce your cost of doing business.
Table of Contents
1. Cut Production Expenses
If you are in the manufacturing business, you need to learn how to cut your production expenses. This means reducing your spending on material costs while optimizing your resources.
For starters, you can sort your paper, cardboard, and metal materials that are leftovers from your manufacturing processes. But instead of shipping them to the recycling center, consider selling them.
Also, you need to maximize your production area. Inspect your production space if there are spots that serve no significant purpose. From there, consolidate the space or centralize your production spots.
2. Revisit Your Time Strategies
We all know that time is of the essence, especially when it comes to running a business. So revisit your time strategies to optimize your company’s productivity.
Your goal is to avoid wasting time. This applies to everyone in the company from the bottom to you, the business owner.
Begin by minimizing all possible sources of distractions in the workplace. You can instruct your employees to download time management apps like Rescue Time. This will help them focus more on their tasks.
Also, you need to schedule all your business activities. From there, instill in your employees the need to follow the schedule, no matter what.
Set expectations about completing different tasks. Don’t hesitate to give incentives to employees who finish their work early. The earlier they finish their tasks, the more time they will have to do other assignments.
Alternatively, you may invest in self service kiosks instead of hiring new employees.
3. Reduce Your Office Space Expenses
Another important key to lowering business costs is to make the most out of your space. If your business doesn’t involve production, perhaps you can streamline your operations further.
Examine your business operations and see if you can move to a more affordable location. If moving is a hassle, talk to your landlord for a friendlier leasing agreement.
And if you only have one or two employees, you may consider moving your operations to your home. And if it is only you who’s doing most of the job, consider shifting your operations into mobile.
4. Crowdfunding Works
As more businesses adapt to the dynamic digital landscape, you may consider financing part of your business through crowdfunding. This involves looking for potential investors who share the same goals as what your business is trying to achieve.
Crowdfunding is perfect for short-term projects that require quick funding. Through crowdfunding platforms like Kickstarter, you can generate funds and launch a niche product faster.
5. Barter to Lower Business Costs
Sometimes, you need to look at age-old methods of cutting your business expenses. One good example is the practice of bartering. This involves exchanges of goods and services.
If your business often ends up with excess items, consider bartering them. Connect with companies that offer items that your business needs. In exchange, offer them some of your services that may help their end.
For example, if your business needs search engine optimization (SEO), you can talk to a freelance SEO specialist and offer your products in exchange for his services.
The key to successful bartering is for both parties to fulfill their end of the deal faithfully.
6. Review Your Vehicle Expenses
Does your business require moving your products to different places? Then you need to revisit your vehicle expenses.
Start by limiting your vehicle usage to essential travels. This means using your trucks or delivery vans only for business purposes.
Also, you may want to rethink your decision to buy that new cube van. Instead of buying a brand new truck, go for a pre-owned alternative.
Check out the different websites for classified ads. These are excellent places to find used but not abused vehicles.
7. Use Email and Social Media Advertising
If you’re thinking of spending on traditional advertising methods, place the idea on the back burner for the meantime. Instead, consider email marketing.
Tap into your client database and start sending them emails with ads about your products. Also, discover the potential of social media marketing.
There are over 3.6 billion people who are on social media. Once you determine your target market, use your social media accounts to market your products.
These options are way more affordable compared to placing ads on TV and billboards.
8. Make Your Office More Energy-Efficient
Going back to your office, you need to make it more energy-efficient. Incorporate passive energy-saving methods. Replace your regular windows with double-pane ones that are better insulators.
As for your curtains, replace them with blackout curtains. These will keep your office cooler, especially during warmer months.
Also, apply some caulk and weather strips, especially if you’re renting an old office. Seal the door frames, air vents, and exterior windows.
These are small tips that will play a big role in lowering your monthly electric consumption.
9. Embrace Telecommuting
Last but not least, be open to telecommuting or working from home. This setup, however, depends on how your business operates. You don’t need to have everyone working at home.
Instead, assign a specific schedule for your staff where they will alternate working at home and in the office.
Today, some of the leading brands in the country are now encouraging remote work. Their employees welcome this move, considering the ongoing pandemic.
Improve Your Business Management Skills
Learning how to cut your business costs is crucial, especially in these trying times. But managing your business expenses is only one area you need to cover.
We invite you to read our other articles and expand your business management skills. We discuss topics that will help increase your bottom line.