Running a small business, especially a brand new one, is expensive. There are just so many things you need, and it can feel like there’s never enough money to go around.
Like a lot of people, you might be focused primarily on increasing revenue, rather than paying close attention to your expenses. The problem with this, of course, is the revenue doesn’t always catch up, and there could be a lot of money going to waste. Money that could be put to better use for the success of your business.
Here are some simple, yet effective ways to cut costs for your business so you can keep more of that precious revenue for more important things.
5 ways to cut costs for your business:
1. Sweat the small stuff
All those small monthly charges might not seem like much on their face, but they can quickly add up to be a serious gut punch to your bottom line. Odds are, there’s room to make some cuts.
For example, take a look at your cell phone bill. Does the monthly total make you feel queasy? How many lines are you paying for? Are any of them assigned to former employees or family members?
Some other areas to check for overspending:
- Interest charges or late fees
- Software that nobody is using
- Office supplies
- Business and auto insurance
- Monthly subscriptions for apps or web services you don’t really need
Figure out what you really need to spend in order to run your business, then get rid of the fluff.
2. Let your employees work remotely
Does your business include a lot of people who work on computers? Are you paying a bunch of money to keep them corralled into an office space? Are you paying for desks and snacks and air conditioning and employee parking?
All of that can be reduced, or even eliminated, by having people work remotely more often.
Try switching to video conferencing, with the occasional in-person meeting or social event. That will save a ton of money, while still cultivating and maintaining a healthy team camaraderie.
Remote working has the added benefit of eliminating commute time. Your employees will love it. They’ll be able to sleep later, spend way less time in traffic, and they can even eat that leftover fish for lunch, without the shame that comes with stinking up the whole office.
3. Create a network for trading
Cash is a luxury that many start-ups and small businesses don’t have. A great way to get around that, without building up a huge pile of debt, is to trade your goods or services with other businesses that have things you need.
Start with other business owners you know and explore exchange opportunities that will be mutually beneficial for both parties. And be selective – you should only trade with businesses that offer goods or services your business actually needs.
That said, our team at FusePhase has been known to occasionally provide accounting services in exchange for Golden State Warriors tickets. This might not fit the traditional definition of a business need, but that’s certainly debatable here in the Bay Area.
4. Don’t be afraid to buy used stuff
As much as we all enjoy having the newest, shiniest toys, it’s rarely necessary to spend all that money.
You can buy a two-year-old computer for pennies on the dollar. And just think, only two years ago that computer was one of the best computers ever made. You and your team can most likely accomplish everything you need to without all the latest and greatest equipment. And you probably won’t even notice the difference – other than you’ll save your business heaps of money.
Same goes for other technology, office furniture, company vehicles, and just about anything else you can think of that your business might need.
5. Save money by outsourcing
In today’s so-called “gig economy,” it’s easier than ever to find qualified professionals to help you with just about anything your business might need – from payroll to bookkeeping and accounting.
Outsourcing can help you to focus more on what you do best while trusted experts handle tasks you don’t like or don’t have the skills to do yourself. Not only could you save yourself precious time, but you could also save heaps of money on overhead costs, salaries, equipment, and other expenses related to hiring and managing an in-house team.
Take a good look at the day-to-day tasks that could be draining your business of valuable resources. You might be surprised at how much time and money you could save for your business by outsourcing.
It pays to pay attention to your spending
These are just a few ways to cut costs, from one small business to another. The most important takeaway here is that it is absolutely critical to pay close attention to exactly how much money it’s costing you to run your business.
If you’re not careful, you’ll end up spending more money to run your company than it makes. This is to be expected in the early years, of course, but you’ll need to get a handle on those expenses if you want your company to ever have some later years.
Anything else you would add to the list? What are some ways you’ve cut costs for your business? Tell us in the comments!