Here are 8 ideas you can consider to reduce your business costs and improve the bottom line.
1. Create and Stick to a Working Business Budget
Budgeting goes hand-in-hand with reduced business costs because it’s impossible to make smart financial decisions without a clear idea of the money you have coming in and going out of your business every month. You have to be sure that you can make enough cash flow and profit from your venture so that you can cover the expenses associated with it. The only way to do that is to establish a budget. The budget gives you some control. A working business budget that you use daily can become a powerful tool for reducing your business costs effectively. Don’t put your budget in a drawer and forget about it. Use it daily. Your business will run much smoother in the present and the future if you do this.
2. Use Technology
Technology allows us to save money and advance our businesses in ways that weren’t possible even five years ago. From teleconference services and online payment services, to open-source software and remote desktop applications, there are many ways you can reduce business costs with technology.
3. Ditch Your Landline
Traditional telephone lines can be an expensive and sometimes unnecessary business cost. Voice over Internet Protocol (VoIP) offers online phone services, often for a fraction of the cost of landlines or cellular phones. VoIP allows you to make and receive phone calls via an online connection. Your phone will be fitted with a router or adapter that is connected to the Internet, and the calls are routed through broadband or DSL lines instead of traditional phone lines. You will have a phone number, and some providers let you keep your current one. VoIP and virtual phone lines instead of a traditional landline can reduce your business costs.
4. Go Paperless
The cost of paper, ink, mailing supplies and postage may seem minimal at times, but it can add up to a large business expense. Going paperless by not printing unless absolutely necessary, transitioning to a digital invoice and bill payment system, and filing all important paperwork on your computer instead of a file cabinet can help you reduce some of the most common recurring business costs. Being paperless means all of your important documents are digitized. You can back them up to the Cloud or access them through a remote desktop application, giving you the ability to work from a mobile office, and stay productive. It’s important for every small business, and particularly those that are paperless, to have a system for backing up and protecting data off-site.
The decision to go paperless is one that varies from business to business, and it’s certainly not a universal decision that is right for every company. The most important part of making the decision to go paperless is doing your research so you can decide if the benefits outweigh the challenges. Then, create a systematic process that will not only afford you the benefits of being paperless, but also help improve your productivity at the same time.
5. Market Your Business Online
If you have yet to jump on the internet marketing bandwagon, you may be missing the potential of fast-paced, high- result, low-cost marketing. You can start with a business blog, social media marketing, or other online advertising and have the potential to see a relatively quick response with minimal business costs. Make it easy to subscribe to your online marketing and you can cost-effectively build your customer database. Keep in mind that building online marketing is best approached as a marathon, rather than a sprint.
6. Explore an Alternative Place of Business
The expenses that come with having a physical place of business can be immense, and in many cases, this is unavoidable. If you are in a situation that can change, however, you may be able to reduce your business costs dramatically by downsizing your retail location, exploring a co-working arrangement, or even converting your business to a home-based business.
7. Buy Refurbished Equipment
Buying brand new, retail-priced equipment is a big business cost. Look into cheaper options available for similar furniture and equipment not marketed as ‘office’ specific. You can also reduce the expense by buying refurbished furniture and equipment that is often as good as the brand new variety but offered by manufacturers at a discounted price.
8. Reduce Credit Card Debt
You may be able to reduce your immediate business costs by charging business expenses to your business credit card, but with interest rates and possible fees, this is not an effective way to reduce your business costs long term. Reducing your credit card debt is not quick and easy way to reduce your business costs, but it’s a smart way to make your business more financially healthy over the long term.
Each of these 8 ways to reduce business costs focuses on making an alternate decision that can save you money. If you are able to adopt a ‘business cost friendly’ mindset, many of these smart decisions will become second nature and eventually work their way into all of your business decisions, helping you reduce your business costs every day.