The purpose of any business is to generate money. However, as business owners are surely aware, running a company costs a lot of money, as well. The key to success is to balance out the income and expenditures so that you always come out on top — profiting off of your operations rather than having to pay extra just to stay afloat.
Small business owners have it even worse than the managers of large corporations and banks — mom-and-pop shops and e-commerce sellers can’t count on the guaranteed cash flow that industry giants can be certain of. That is not to say that big companies never run into financial trouble — they do, but it has an almost immediate impact on the firm’s accounts when they cut costs.
Let’s say that a multinational conglomerate makes the switch from in-house servers to cloud IT services in all of their offices worldwide — the expenses will be reduced significantly, and the effect of this change will be measured in millions of dollars. A small business can opt for a similar move, but they may need more ways to cut their expenditures in order to continue making money in the long run.
If you’re a business owner looking for effective ways to reduce your expenses in the long term, check out the tips below to get yourself started!
Re-evaluate Your Telecoms (and Software, too!)
Many people don’t even realize how often telecommunications companies raise their monthly service costs without adequately notifying their customers. Of course, they are allowed to do so, and if you check your mailbox carefully, you might bump into a message about “increasing the quality of their services,” which is just fancy corporate talk for charging you more for the landline.
In situations where every penny counts, you might want to consider switching to a VoIP (voice over internet protocol) service — it offers phone solutions that are much cheaper than the traditional landline (VoIP doesn’t rely on additional infrastructure). Your employees won’t notice the difference, and you’ll see improvements in the books just a couple of months after making the switch!
In addition to changing telecom service providers, you may also want to re-evaluate your software needs. A lot of companies overpay for programs they don’t necessarily need — use Minitool instead of Sony Vegas for short marketing videos or Canva instead of Photoshop when it comes to designing posters and other promotional materials.
Hire More Freelancers
Another great way to immediately alleviate your financial pain is by hiring freelancers to complete tasks that can be done remotely and with moderate intensity. Hiring a full-time worker is associated with training, insurance, and equipment costs that are simply non-existent when working with freelancers.
It may sound harsh, but if you’re really strapped for cash, you might want to consider laying off some of your workers and choosing to enlist a freelancer’s services instead. It’ll help you reduce expenses without having to sacrifice getting all of the necessary work done. You can outsource pretty much any task from copywriting through social media management all the way to accounting (if you’re brave enough). There are plenty of online platforms where you can find potential freelancers for a fraction of the money you’re paying your current employees.
Downsize the Office
If your company mostly operates digitally, and the majority of work is done on computers and via the Internet, you should seriously consider letting some, if not most, of your workers, carry out their duties from home. It’ll let you cut business costs, as you won’t need as much office space and will be able to move to a smaller office and sell the equipment your remote workforce was using prior to this alteration.
You may think it’s not the best solution, especially when productivity is something you care about the most. In this case, you should look into how the switch to remote work forced upon most companies in the world by the COVID-19 pandemic has impacted people’s productivity and will to work. You’ll find the results surprising, to say the least.
Printers and copy machines are expensive to buy and even more expensive to maintain in the long run. Going paperless is not only fashionable — it’s a smart business decision. Everything is done over the Internet right now anyway, rendering paper all but redundant. Even signatures can be digital. All of the money you’d usually spend on ink, paper, and toner will stay in the company’s account. It will add up to quite a sum after a few months without paper.
Bring Some Interns On Board
Creating an internship program can be a very smart move for your company and its finances, given that you go about it intelligently. You could use this young workforce to handle things that would cost much more if they were to be handled by experienced employees with bigger requirements when it comes to their salary. In order to encourage them to stay productive during this low-paid (or even unpaid) period in their professional lives, you can promise a full-time position to your best-performing interns. This will ensure that they do their job correctly and help your business — having a homegrown, dedicated workforce is a dream of many entrepreneurs.
The Bottom Line
As you can see from the examples outlined above, there are plenty of low-cost ways to reduce business expenditures while maintaining the same productivity levels.
Of course, your options are not limited to those listed in this article. You can restrict business travel to the bare minimum in order to experience short-term financial boosts every now and then, as well as refrain from giving out company credit cards to all but the executive staff. Making the switch to social media marketing can also reduce your traditional advertising cost. When everything is holed up in their houses anyway, it won’t make a difference in terms of reach.
When it comes to cost-cutting, you should make sure that you save money without sacrificing productivity. Other than that — your own creativity is the only limit!