Business costs may vary wildly depending on industry and circumstances. Some costs, like the workspace, will be recurring and predictable while others, such as burglaries or thefts, may go unnoticed for months or years.
All are worth considering as you look at their impact on your bottom line. In the following article, we’ll be discussing the ways to cut expenses proven to make the biggest impact. Let’s begin!
1. Audit Expenses Frequently
The first way to cut costs dramatically is to take a hard look at what you’re spending from day today. Where are all the known demands on your money, and where are you spending more liberally?
It’s easy to see an expense like commercial rent coming, but it’s a little more challenging to keep up with expenses that fluctuate, such as travel and production costs. Scrutinizing every dollar frequently will help you notice trends and patterns over which you can gain better control.
2. Let Them Know You Are on the Market
Everything is negotiable. Business rent, production costs, office supplies, and even shipping. You owe it to yourself to shop around and to occasionally let your vendors know you are on the market (or at least considering it).
It doesn’t even have to be awkward if you let them know up-front that cutting costs is important to the survival of your business. This will motivate them to come at you with their best offers or at least be willing to match offers from other companies.
3. Harness the Power of Online Marketing
Operational costs can also take a noticeable dip if you re-evaluate your marketing efforts. Are you spending a lot of money on newspaper and magazine advertising?
We’re not telling you to stop necessarily, but you do need to use the power of data to see if those investments are worthwhile. You’ll likely turn to online marketing if you haven’t already.
This is a good thing. Consider Wendy’s and the story of Carter Wilkerson as an example. Through an investment of about $1,000 in Wendy’s gift cards, the fast-food chain rode a viral wave that resulted in millions of dollars in free advertising thanks to a few simple (and funny) tweets.
4. Pay Employees Well
This cost of doing business “cut” isn’t a cut at all. It’s actually an increase, at least on the surface. How can paying your employees more (through salary and/or benefits) cut your bottom line?
- Employee retention: less money spent on training new employees or paying overtime when poorly trained employees leave you on short (or no) notice.
- Greater productivity: well-treated employees go the extra mile and take ownership.
- Less paid in legal expenses or unemployment: think disgruntled employees.
Happy employees speak well of your business and represent. This can help on the revenue side as well.
5. Rethink Your Tech
Lastly, wanting to spend less or reduce ongoing expenses should lead to some discussion about how you use technology. Where can you simplify tasks that require personnel through software and other forms of tech?
A reliable pay stubs maker for your business, for example, might help you get more out of your human resources department. Look into other apps and programs wherever possible.
Cutting Business Costs Help You Survive Until You Thrive
Reducing business costs will help you gain control over your business. This is important at every stage but especially as you work to grow revenue.
To get there, look frequently at how you’re doing business, treating your employees, and using technology. Best of luck! For more business tips and advice, check out some of our additional posts!