If you’re having a hard time generating revenue and/or cash flow, you may need to take measures to reduce your business expenses. Even a company with a healthy cash flow could benefit from cost-cutting measures to improve its profitability. Here are 10 ways to reduce expenses that can have a significant impact on your bottom line.
One easy way to start knowing where to reduce business expense is to know where your spending are going. A business expense card can help with that. Read this article on how to get a Moniepoint expenses card for your business.
1. Evaluate staff responsibilities before hiring new people
Before you hire additional employees, take some time to evaluate your team’s responsibilities and see if certain tasks can’t be delegated or distributed more effectively. You may find that you can get the work you need from your current staff and save a great deal of money by not having to pay for an additional person’s salary and benefits.
2. Look to freelancers where applicable
Have you explored the freelance market for workers? You may not need a huge in-house staff to get things done. Popular freelance professions include content writers, videographers, web developers, graphic artists, communications consultants, and patent attorneys, among others. Try websites such as Upwork, Freelancer, and others, where freelancers are constantly looking for work. You may be able to get work done without having to add a permanent position to your payroll.
3. Try interns
Another option is to try out an internship program. This can be a great way to boost productivity without boosting your own expenses. It can also lead to interns becoming valuable employees who are already familiar with the company. Just make sure you familiarize yourself with related laws.1
4. Explore alternative suppliers
You may be able to save money by changing suppliers. Don’t become too comfortable with those with whom you’re currently doing business. Always be on the lookout for less expensive options. You may even be able to get your current suppliers to reduce pricing if they think you’re willing to go with a competitor.
5. Explore insurance alternatives
The same goes for your insurance provider. Keep an eye on your options and don’t hesitate to switch providers if you find a more economically attractive plan elsewhere.
6. Consider having your team work remotely
Technology makes it not only possible, but relatively easy, to have constant communication and face-to-face meetings from anywhere. Why not take advantage of this and put rent money to more productive use? Working remotely won’t make sense for every business, but if it could work for yours, it could eliminate a major expense.
7. Use free software offerings
Just as your internal communications can happen in the cloud, so can many of the software tasks you rely upon. In some cases, free software products may be just as good as paid versions. Take a look at any paid programs you are currently using and see if there are free, cloud-based alternatives. If the cloud element isn’t required, you may still be able to find free software that does what you need it to do.
8. Exchange services with other businesses
Many small businesses develop relationships with one another in which barter agreements are worked out. These businesses exchange services rather than pay each other directly. This generally happens at the local level. Attend networking events and meet other business owners in your area. You may discover some that can benefit from your goods/services while offering something of value to your own company.
9. Purchase second-hand when possible
When it comes to expensive purchases, such as equipment, furniture, vehicles, etc., you may be able to save some money by going with second-hand options. You may be surprised at some of the bargains you find on “good as new” merchandise.
10. Look for ways to reduce energy costs
Ask for a free energy audit from your utility company. Then, look for other ways to reduce your energy costs: replace bulbs with energy efficient ones, invest in a programmable thermostat and more energy efficient items, air seal your building, schedule computer hibernation periods, use efficient power strips, and reduce paper usage.
Not every one of these options is going to make a huge difference on its own, but the more of these tips you can apply, the more substantial your savings may be.
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