Running a small business can be a complicated endeavor, and before you know it your costs can grow. Sometimes it’s difficult to know where to even look to cut costs, without hurting your business in the process. To help give you a discerning eye when checking out your expenses, we’ve put together a list of the top ways to reduce your costs.
1. Cut Back On Software
Your company probably pays for a lot of services. Bookkeeping, cloud storage, telephones, CRM software, all through monthly or annual plans. You will want to make sure you do a full review of the plans you are paying for at least once a year.
If it turns out you aren’t using a service as much as you’d anticipated, you can often downgrade into a cheaper plan. On the flip side, if you are regularly hitting overages on plans such as cell phones, make sure to upgrade to a more appropriate service level.
2. Efficiently Use Your Space
Over the years offices have been steadily shrinking overall. In 2012 the average new office lease had 185 square feet of dedicated office space per employee. That’s more than a 20% decrease since 2000.
Collaborative workstations and multipurpose rooms (e.g. conference rooms that double as break rooms) are helping business owners make the most of the space they have. This helps your business continue growing while delaying a move to a larger, more expensive office.
3. Get Creative With Business Marketing
Just about everyone has a pile of pens, water-bottles, and notebooks donning the logo of various businesses. Although you probably use these products occasionally, there is a whole world of useful items available for your business logo to be printed on.
Give away some USB chargers, so your clients remember your name when their phone is on its last percent before dying. How about a customized box of chocolates to seal that important deal coming up? The print promotion world can be overwhelming, but we’re here to help! You can view our wide selection at https://www.idealanding.us, and contact us for a free consultation of how we can improve your print promotion strategy.
4. Use Technology
If your business has been around for a while, you may not be taking advantage of improved, cheaper systems to replace some of the old systems that were staples. Even if you are still sending documents by fax, you may be more efficient with a virtual fax service. Instead of having a landline, it’s often cheaper to go with a VoIP service, which also gives you the freedom of answering calls from anywhere.
5. Buy Lightly Used
The secondhand market, especially for items related to business, is thriving now more than ever. There are a plethora of things in great condition, that are often much cheaper than buying new. Some common items to check used offerings first include:
- Printers and copiers
- Smartphones, tablets, and laptops
- Delivery vans and company cars
- Storage equipment
- Packing equipment
- Furniture
6. Pay Invoices Early
Many vendors offer small but meaningful discounts to clients that pay invoices ahead of schedule. For instance, it’s common for vendors to knock 2% off the invoice total when clients pay in full within 10 days, instead of the usual 30 days. This is typically represented as “2/10 net 30”
As long as paying early doesn’t negatively impact your cash flow, it usually makes financial sense to do so. This is especially true in a low-interest environment, where the cost of short-term borrowing to bridge any shortfall is unlikely to exceed the value of the discount.
7. Social Media Advertising
Traditional advertising is expensive, a prime-time broadcast TV commercial’s average cost per 1,000 impressions (CPM as the cost to serve the ad to 1,000 viewers) was $24.76 in 2014. That works out to about $112,000 per 30-second spot, on average. For
Social media advertising is much cheaper. The average U.S. Facebook ad’s CPM cost was $7.19 in Q3 of 2016, that’s less than a third the cost of a prime-time TV ad. Social media ads are also less costly to produce, the most cost-effective social ads remain simple, easy to make memes.
With proper management, you don’t have to pay for social media advertising at all. If you devote time and personnel to engaging your company’s fans and building your social following organically, you can reach thousands of current or prospective customers without spending a penny.
8. Use Freelancers and Contractors
Freelancers and independent contractors are easier to hire and cheaper to keep employed than traditional employees. That is, provided you have an enforceable freelance contract to set expectations and mitigate risk. You aren’t expected to provide freelancers with health insurance benefits, pre-tax retirement accounts, family leave, paid time off, or other pricey benefits. You just need to pay them for completed work.
It’s important not to over-rely on freelancers and contractors, as they’re likely to be less loyal and may have other relationships that distract from their work for your company. But for one-off projects and ongoing, non-core activities, they can serve as an important resource that keeps your company’s labor costs under control.
9. Monitor Energy Consumption
Heating and air conditioning are a requirement for a suitable workspace. Programmable and smart thermostats are a great start to becoming more energy efficient, and in turn, saves money. Set a heating and cooling schedule for when people are in the office, and save money by turning the systems off at night.
Apart from upgrading your thermostat, there are some other great ways to rack up energy savings.
- Double-Pane Windows: Double-pane windows are much better insulators than the older single panes. They may be more expensive to buy, but the energy savings add up quick.
- Light-Blocking Blinds and Curtains: Use blackout curtains on windows to reflect solar rays on warm days, and open them up to let the warmth in on cold days.
- Tight Seals: If you work in an older structure, caulk and weatherstrips are common heat loss points. Make sure to check exterior window and door frames, utility line entries, and air vents. In a small space, the entire project can cost as little as $20 or $30.
- Solar Water Heater: If you’re responsible for your building’s mechanical appliances, invest in energy efficient upgrades as your budget allows. Top of your list should be a solar water heater, which uses the power of the sun to heat your fresh water supply. A residential solar water heater costs between $8,000 and $10,000. That’s likely sufficient for home offices and small commercial spaces, such as converted houses.
10. Remember Everything Is Negotiable
Unless it’s clearly spelled out in a binding contract, every listed price is negotiable. Business owners tend to look out for each other, and simply mentioning that you own
When outfitting your new commercial suite or home office, ask the interior decorator if they offer discounts or bonuses for new client referrals. Likewise, if you’re buying 10 or 20 desks or laptops at once, you’ll likely qualify for a volume discount, but you won’t know it unless you