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15 Practical Ways To Reduce Business Costs

15 Practical Ways To Reduce Business Costs

As a business owner you can’t stop for searching new ways to reduce business costs and gain more profits. Otherwise, your business will never thrive. By implementing these 15 simple strategies within a year, you’d be able to save thousands of dollars in net profit!

1. Take advantage of the freelance workforce

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    A recent study predicts 40% of the U.S.’s workforce will go freelance by 2020. Why not start taking advantage of a temporary team from day one and avoid paying huge overheads and adding up costs like sick leaves, training, vacations, insurance, and so on? Having a flexible team working on a per-project/task basis will significantly reduce your business operating costs, improve overall key performance indicators, and will allow you to focus on more important tasks while minor things are getting solved by your dedicated virtual assistant. Nowadays, you can basically outsource anything, from handling emails and managing your FB business page to complete website design and full-cycle development projects. Besides, hiring a specialist abroad may cost you less than hiring someone with the same skill set back at home.

    Most popular freelance marketplaces:

    All types of projects

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    Micro jobs and small, simple tasks

    Design

    Coding and web development

    2. Start an internship program

    Sometimes, having a remote worker is not an option as you need help onsite—say, sorting out that huge pile of papers on your desk. Get in touch with a local college and offer to establish mutually beneficial relationships—you get a free workforce; they get a cool company to send students to. Win-win. Alternatively, you can post an advert online at sites like Urban Interns and check out all the rising stars eager to work with you for a shining resume credential and real hands-on experience. Moreover, there are high chances of discovering true talents to hire afterwards as part-time or full-time assistants who already know how to things get done at your company.

    3. Use energy-efficient appliances

    Utility bills eating up a huge chunk of your income? First of all, opt for compact fluorescent light bulbs. They cost more than the usual bulbs, however they function longer, thus saving you a pretty penny in the long run. Secondly, consider switching to energy-efficient appliances, particularly those with the Energy Star label. Again, they do cost more, but you can cut down the expenses with numerous government-sponsored rebates, along with making your biz eligible for green energy tax credits. If you need professional advice on making your company more energy efficient, just ring up your power company and request a free energy audit. An inspector should come to analyze your workplace and suggest further ways to reduce energy consumption.

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    4. Keep a virtual office

    If most of your team works remote and you don’t have an ongoing need to gather at one place, why should you bother to pay huge rent for the office space? Business meetings can be held at any venue, co-working space, or conference hall. However, you still like to keep things looking professional and earn your credits, right? And occasionally you do need to fax something or print a bunch of promotional materials. If that is it, most virtual offices provide you with temporary printing solutions at a flat rate; VoIP phones with a personal voice message box; corporate mailing address; a dedicated receptionist handling your calls and a bunch of other cool perks that tend to cost a tiny fortune when implemented at a regular office.

    5. Barter

    So you run a small writing business. Have you ever though of offering your professional editing services to have a marketing campaign developed for you in return? Bartering is no longer difficult with a number of B2B barter sites like U-Exchange and TradeBank gaining huge popularity among small and middle sized business owners. Set up an account and start exchanging services you need! Besides, it’s an excellent way to grow your business connections and score potential customers or partners.

    6. Go paperless

    Do you really think you need those copies printed for everyone? Now look at your monthly printing costs and think again. Still opting for paper bills and invoices? That’s stone age with so many online payment and invoices systems available at reduced costs. Retain your clients with email marketing and ditch mailing coupons and advertorials by snail mail to cut down the costs even more!

    7. Re-examine your phone plan and ditch your land line

    Are you sure you have the best cellphone plan currently available on the market? How long has it been since you last checked the prices? If you signed up for your plan more than two years ago, it’s definitely not the best option available on the market today. If you need to make international phone calls frequently, use Skype or Line, an app that has lower prices. Moreover, swapping your land line for VoIP or a virtual phone line will save you a big bucks at the end of the day.

    8. Don’t be shy to ask for a discount

    Take the nerve and ask the retailers directly whether they can give you a discount as a small business owner. Surprisingly, most will say yes if you are shopping for big ticket items. Alternatively, sneak around for coupons and special deals, sign up to retailers’ newsletters to be the first to know when certain items come on sale, plus get a few money-saving apps installed on your phone to receive instant alerts.

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    9. Invest in self-education

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      If you feel reluctant about paying yet another one-time consultants to solve the problem for you, spend less on self-education. Or pay nothing and gain lacking knowledge at one of these 25 killer educational websites. There’s no better investment than education and in the long-run, spending time and effort on learning something new will pay off later on!

      10. Buy used equipment and furniture

      Shopping in thrift shops and bargain sales is no longer shameful. It’s trendy. Loads of businesses prefer to equip their offices with shabby vintage stuff costing pennies instead of luxury designer goods (that often look pretty much the same). Businesses claim to save up to 60% costs merely buying used office equipment like computers, faxes and printers. Scroll through Craigslist, check out your local paper classified and online auctions like eBay to get everything you need at least two times cheaper.

      11. Cut back on paid software

      Nowadays there’s an open-source free alternative to nearly any product at the tech market. Unless a specific software is absolutely crucial for keeping your business running smooth, get rid of it! Microsoft Office can be replaced with Open Office or Google Drive; Basecamp has a free, similar-looking alternative Trello and you can create beautiful online and PDF designs with free photo-editing tools like Canva or Picmonkey instead of using Photoshop. Which leads as to the next point…

      12. Conduct timely technology and services audits

      How many paid apps and subscriptions do you currently have? And how many are you actually using? Bet these two numbers differ quite a bit. If you have not used a certain technology or service for the last 90 days, it’s time to cancel your subscription and stop paying for things you obviously do not need. Make it a rule to review all the paid products you have every two months. Moreover, before getting yet another piece of paid software, visit Download.com and try hundreds of software products for free through trial downloads, limited versions, and freeware to make sure that it’s indeed a product you need.

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      13. Eliminate finance charges

      A lot of businesses lose thousands dollars annually on ridiculous things like high membership fees on business credit cards, late loan payments and credit-card processing fees. By simply staying on top of bills and paying them exactly when they are due, you will save your business a great amount of money each year. Yes, keeping up with the bills can be complicated, so try to automate as many financial processes as possible by implementing online payment systems and setting up special alerts when bills are due. Also, pay a visit to your bank and ask what better credit card options they can offer you as a business owner.

      14. Opt for online advertising

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        Does your business have a Facebook page and Twitter and Pinterest accounts? Do you have a website properly optimized for mobile search? In 2015 if your business is not online, it practically does not exist! Compared to traditional marketing and advertising, promoting your biz online allows you to get faster results with less money spent. Start small by adding a blog to your website, offer expert advice, reach out to new media and bloggers with thrilling stories you can share, invest some time and money in social media marketing, and optimize your website properly to get a huge amount of targeted traffic and new customers.

        15. Use the power of co-opetition

        Team up with fellow business owners to collaborate and share expenses when buying new supplies in bulk. Moreover, you can group even further and jointly promote a sidewalk sale, share mailing lists and distribution channels with businesses offering complementary goods or services that may interest your customers. Also, you can exchange advertising spaces on your websites, share each other’s coupons and special deals (for a small fee or percentage from each sale made) and occasionally appear at each other’s business blogs to boost your rankings and attract a new audience to your websites.

        Featured photo credit: ShellyS via flickr.com

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        Elena Prokopets

        Freelance Writer

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        Published on May 7, 2019

        How to Invest for Retirement (The Smart and Stress-Free Way)

        How to Invest for Retirement (The Smart and Stress-Free Way)

        When it comes to stocks, I bet you feel like you have no idea what you’re doing.

        Everyone who’s not a financial expert has been there. I’ve been there. But, time is passing and you need to be crystal clear with how you’re investing for your retirement.

        Otherwise, it’s back to work until you can afford not to. So, how can you invest for retirement when you’re not a financial expert?

        You take the time to learn the fundamentals well. If you do, you can grow your wealth and retire happy. The best part is that you don’t need to be a financial expert to make smart investment decisions.

        Here’s how to invest for retirement the smart and stress-free way:

        1. Know Clearly Why You Invest

        Odds are you already know why should invest for retirement.

        But, maybe you know the wrong reasons. It’s time you get clear on why you’d like to retire. Here are some questions to help you get started:

        • Will you spend more time with your family?
        • What does retirement mean to you?
        • Are you looking to launch that business you’ve been holding off for years?

        Everyone wants to retire but not for the same reasons. Once you’re clear for why retirement is important for you, you’ll focus on making it happen.

        Investing in the stock market allows you to take advantage of compound interest.[1] All this means is that your money earns money on top of its interest. A reason why investment in the stock market is one of the best ways to plan for retirement.

        2. Figure out When to Invest

        “The best time to plant a tree was 20 years ago. The second best time is now.”– Chinese Proverb

        It’s true if you’d had started investing when you were 10 years old, you’d have a lot more money than you do today.

        The reality is that most people don’t start investing until it’s too late. So, if you’re currently waiting for the perfect time to start an investment, it would be today. Open your calendar and block out 2 to 3 hours to choose how you’ll invest for retirement.

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        A quick way to get a snapshot of where you stand is to use Personal Capital. Input all your personal information and spend some time setting your retirement goals. Once completed, you’ll know where you stand with your retirement.

        Having a savings account for retirement isn’t planning for retirement. Why? Your money loses value when you factor in US inflation.[2]

        3. Evaluate Your Risk Tolerance to Create the Perfect Portfolio

        Investing your money well depends on your emotions.

        Why?

        Because when the market drops most people panic and withdraw their money. On average, the US stock market yields an annual 6% to 7% ROI (return on your investment.) But, this won’t happen if you’re worried about short-term loses.

        Before you invest your next dollar, know your risk tolerance.[3] Your risk tolerance determines the number of risky and safe investments you’d have.

        Regardless of your investing style, you need to view investing for retirement as a long term game. Know that some years you’ll lose money but recoup this in the long-term.

        Avoid watching market-related new. Also, create a double authentication to log in your investment account. This way you’re less likely to withdraw your money.

        4. Open a Reliable Retirement Account

        Depending on your circumstance, you may need to open a new brokerage account. This is the account is where you’ll invest your money.

        If you’re currently working for a company, odds are that they offer a 410K investing account. If so, here’s where you’ll invest most of your money. The only problem with this is that you’re limited to the stock options that are available.

        You do have the option to open a separate IRA (individual retirement account.) Here are some of the best brokers:

        1. Vanguard
        2. TD Ameritrade
        3. Charles Schwab

        5. Challenge Yourself to Invest Consistently

        Committing to invest for retirement is hard, but continuing to do so is harder.

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        Once you’ve started investment for your retirement, you run at risk from stopping. Often you’ll want to contribute less, so you’d have more money in your pocket.

        That’s why it’s important that you create a budget that allows you to invest each month. If you’re working for a company, you can set a percentage for the amount you’d like to contribute each month. Most people by default contribute 1% but aim to contribute 10% to 15%.

        Be the judge for how much you can afford to contribute after covering important expenses. To stay motivated, use Personal Capital to view your net worth.

        A benefit to contributing money to your retirement account is not taxed. For example, if you earn $100 and invest 10%, you’d contribute $10, then get taxed on the remaining $90. As of 2019, the most you’re able to contribute towards your 401K is 19K but this can change.

        6. Consider Where to Invest Your Money

        The most common way to invest your money is in stocks, but it’s not the only way. Here are other ways to invest:

        Robo Advisors

        Robo-advisors[4] are fancy algorithms that’ll choose the best investments for you. Sites like Wealthfront make it easy for first-time investors to invest their money. You’d input information about yourself and set your risk tolerance.

        Then, set your monthly contribution amount and your robo-advisor would do the rest. Robo-advisors charge a fee to manage your money, but less than regular advisors.

        Bonds

        Think of bonds as “IOUs” to whomever you buy them from.

        Essentially, you’re lending money and charging interest. Like stocks, not all bonds are equal. Some will be riskier than others depending on their rating.

        Here are the different types of bond categories:[5]

        1. Treasury bonds
        2. Government bonds
        3. Corporate bonds
        4. Foreign bonds
        5. Mortgage-backed bonds
        6. Municipal bonds

        Mutual Funds

        Picture a group of people dumping all their money in a jar that’s managed by a professional. This is how mutual funds work. The fund manager manages the money looking to earn capital gains (interest.)

        One of the best types of mutual funds is index funds. Since these funds don’t try to beat the market and instead follow it, they need less research. Because of this they often charge the lowest fees and yield the best long-term results.

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        Real Estate

        Yes, buying a home is an investment when done correctly.

        Imagine buying a home and using it as a rental property. After repairing it, you receive a monthly surplus check of $100 to $200.

        This may not sound like a lot, but repeat this process enough times and you’d earn a large amount of passive income. That’s why real estate is one of the best investments to not only retire but become wealthy.

        But, it requires a lot of money to start and you should expect losing money along the way as you learn the process.

        Savings Accounts

        Your money can still grow in a savings account. Nowadays most online banks offer a 2% annual return. Although the average inflation is higher your money will be available when you need it.

        7. Master Disincline to Dodge Short Success

        Investing for retirement is a long-term strategy. That’s why you need to master delayed gratification. All this means is delaying short-term pleasure for something bigger in the future. Research shows that those who have delayed gratification are more successful.[6]

        So how can you master delayed gratification?

        By building your discipline.

        Think back to what retirement means to you. A clear purpose will help you avoid withdrawing your money during a market downturn. It’ll help you contribute more towards retirement when you’d want to waste it instead.

        Your journey towards retirement will be long, so reward yourself along the way. Choose a reward that’s relevant and meaningful, so that you reinforce positive behavior. For example, after contributing more towards retirement, treat yourself to dinner.

        8. Aggressively Invest on This One Investment

        I’ve mentioned several types of investments but haven’t covered the most important one.

        It sounds cliche but here’s why you’re your best investment towards retirement. The more you know, the more money you’ll be able to make. The more good habits you adopt, the more secure your retirement will be.

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        More importantly, investing in yourself is an investment that no one can take away. There’s no market downturn nor tragic circumstance that’ll wipe your knowledge and experience.

        But, how can you invest yourself?

        Reading books, blogs, and anything that’ll help you learn new topics daily. Listen to podcasts and audiobooks on your commute to/from work.

        Save money to buy courses and hire coaches. I used to believe hiring coaches was a waste of money when I could learn the subject alone.

        But, coaches see your blind spots and hold you accountable. Hiring the right coach will help you achieve your goals faster than you would’ve alone.

        Retire Happy with Excess Money

        The key to a secure financial future doesn’t only belong to financial experts.

        It’s possible for you and I. What if you were able to retire earlier than most people and weren’t a financial planner? What if you were able to focus on what you enjoy doing the most while your money was working hard for you?

        I know this sounds impossible now, but the truth is you’re capable of taking charge of your retirement. I’m not a financial expert but I’ve learned how to invest my money by reading books and learning from others.

        Investing your money is scary. So start small and invest a small amount of your money with a robo-advisor. Feel your money drop and rise for a month or two. Then, invest more and keep this up until you’re aggressively saving for retirement.

        One day, you’ll wake up with a net worth you’re proud of – confident about your retirement. You now know a few strategies you can use to invest in your retirement. Will you take action to retire happy?

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        Featured photo credit: Matthew Bennett via unsplash.com

        Reference

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