Saving money to make sure the business survives the initial stage is equally essential as generating new leads. Majority of the small businesses and start-ups fail because of either running out of cash or lack of funding.
The lenders will not offer you new business loans every time you use up your fund. Even the cost-cutting can sometimes be a disaster with the unnecessary reduction in high operational costs. Therefore, a proper strategy is required for cost-cutting to make sensible use of limited money. To your help, we have created this 10-step guide for reducing business expenses.
Start with cutting down the electricity consumption in the workspace. The electricity bill can cause a significant impact on your company’s monthly budget. Use a smart or programmable thermostat that consumes less power than their traditional counterparts.
There are several measures for passive-energy saving that requires little efforts. These involve use of double-pane windows, blinds and curtain to block lights, and tight windows & door seals. Installation of the solar heater is also recommended to make your office eco-friendly. Also, make sure the non-essential appliances, machinery, and lights are turned off after working hours.
Limiting the use of paper is not only good for the environment but the finances of your company as well. Exchange the printer in your office with those who print on both sides of the sheet. Use electronic mean of transfer instead of courier or mails. You can use the waste paper can be reused for notes and scratches. While using the word editor, reduce the font size and margins.
The legacy systems in your office are time-consuming machinery with considerably more operational cost. You may have invested a little less in them when compared to the latest technology in the market. But the overall cost and lower productivity make them a drag. Invest in the latest computer systems to speed up the processes and save money on energy consumption and maintenance.
You can buy the furniture, computer systems, and much more equipment in second-hand if they are in good condition. There is a significant difference between the prices of used and new stuff. You can also buy used vehicles for delivery or travel to save tons of money.
Instead of spending money on traditional advertising, you can use the digital space to reach the targeted audience. Advertising on Google Adwords or social media is very cost-effective with higher ROI than TV and hoardings. The conventional methods can take a fair share of the money from business start-up loans. Digital means of promotion also encourages word-of-mouth marketing with several options, from storytelling to referral programs. Your social media presence and follower base can eliminate the money paid to run ads.
Contract workers and freelancers cost you less when compared to fulltime employees. The hiring process is easy, with plenty of online platforms available to meet some fantastic talents. Also, there are fewer efforts required to keep them since freelance contract generally set mitigate risk for both the parties. You save plenty of money on employee benefits that include health insurance and paid leaves.
Telecommunication can reduce travelling expenditure to a great extent. The fewer employees will spend on their transportation, the lower raise you can offer to them. Limiting the company paid travel can be a little challenging. Representatives from your business need to socialize, attend seminars, professional meetups, and industry conventions. However, you can reduce the visit to clients with virtual meetings.
Purchasing supplies in bulk is a lucrative deal to save more. But on many occasions, the item purchased ends up not being used for a very long period. You have to throw them away, and the prospect of saving becomes a loss. To make sure it doesn’t happen, ask yourself a few questions before buying something in bulk. Avoid it if the purchase doesn’t make much sense. Try to buy stuff in moderation that is used less frequently.
As mentioned above, virtual meetings are a better alternative to personal meetups to save on travel expenses. The office space is also not required with the use of virtual technology. However, personal contact can be used for unique instances when the purpose of the meeting is more beneficial. Cloud services such as Basecamp and Google Drive streamline collaborative projects with plenty of features. It heavily reduces the use of paper documents and meetings.
The insurance policies and financial accounts need evaluation after a predetermined period to make use of any possible mean of saving. Compare the existing approaches to the available plans in the market. You can then ask the insurance provider to offer you a better price. Consult an expert to check whether the company has over-insured your business or there is some duplicate coverage. Avoid them as much as possible.