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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

        Elena is a passionate blogger who shares about lifestyle tips on Lifehack.

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        Last Updated on July 10, 2020

        The Definitive Guide to Get out of Debt Fast (and Forever)

        The Definitive Guide to Get out of Debt Fast (and Forever)

        Debt can feel crushing, like a weight that is always weighing you down. Looking at those numbers, it can feel as if you’ll never get out from under it. However, if you really want to learn how to get out of debt, it is possible with a great deal of focus and self-control.

        Getting out of debt isn’t impossible. Like any big goal, all that it takes is an action plan to identify where you are and creating a plan to zero out your debt.

        Identifying All of Your Debts

        The first part of paying off your debt is getting a complete picture of what you owe. When you have everything written out in front of you, it makes it much easier to create an action plan. Depending on how much you owe, it might also help you realize it’s not as bad you might have originally thought.

        Here’s how you can get started identifying your debts:

        1. Own Your Debt

        Before you start identifying all of your debts, take a moment to process that you have debt but want to get out of it.

        Forgive yourself for any past mistakes, missed payments, or overspending. It might be painful to accept how much debt you have at first, but you must own it.

        2. Make a Debt Tracker

        It’s astonishing how few people ever created a tracker to understand their total debts. Most likely, it comes from not wanting to accept the guilt of having debt, but, if avoided, it can make it nearly impossible to get out of debt.

        Open up a new Google or Microsoft Excel sheet and list out all of your debts. Start with the name of the creditor, interest rates, total balance, loan term length (if any), and the minimum amount due each payment. This will include student loans, credit cards, and any other type of debt owed.

        3. Get Your Debt Number

        Once you’ve made your debt tracker and taken the other steps, identify your total payoff number. This is crucial, as you will have a starting point and a clear goal that you are trying to achieve.

        Prioritizing Your Debts

        All debt is not created equal. It’s imperative to understand that there are different types of debt.

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        1. Understand Bad and Good Debts

        Bad debts are usually paying for things you want instead of always need. While there might be some emergencies that max out your credit cards, often times it’s excessive spending[1].

        There are three main types of bad debt:

        • Credit Card Debt: The average American household owes over $16,000 in credit card debt!
        • Auto Loan Debt: According to CNBC , the average auto loan in the US is $30,032!
        • Consumer Loan Debt: Consumer loan debt isn’t as common as credit card and auto loan debt, but it’s still considered bad as interest rates are usually between 10-28%.

        Good debt is identified as investments in your future. Here are three common types of good debt:

        • Student Loan Debt
        • Mortgage Loan
        • Business Loans

        2. Decide Which Debt to Pay off First

        Once you know each type of debt and their interest rates, you can begin to pay off debt quickly.

        Focus on paying off bad debt first, regardless of if it is a credit card or auto loan. Start by paying off the loan with the highest interest rate first.

        If you have several credit cards with different interest rates, you want to focus on the one with a higher APR. You will actually save more money by eliminating the card with the highest interest rate.

        3. Don’t Pay the Minimum Amount

        Paying the minimum amount digs you into a hole as interest rates will offset your payment. Even a small amount more than the minimum can help you pay off debt much faster.

        Removing Obstacles to Pay off Debt Quickly

        Creating a debt tracker and prioritizing a plan is simple, but avoiding temptation can be difficult.

        1. Set a Reminder to Track Your Debt

        “If you can’t measure it you can’t manage it.” -Peter Drucker

        It’s so important to track your debt to ensure that you get it paid off quickly. Similar to working out and measuring your results, you need to track your debt constantly. Start with a weekly reminder, where you sign on and log your updated number. Did you increase, decrease, or stay the same?

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        Regularly tracking your student loan balance can be incredibly motivating, as well. You will get a huge confidence boost each time you see your total debt amount decreases.

        Set weekly and monthly goals so you can have short term wins and keep the momentum going.

        2. Hide Your Credit Cards

        If your biggest debt is credit cards, you need to eliminate temptation and remove them from your wallet.

        Some people have gone to extreme measures by freezing their credit cards. Why? This would create an ice block around your card, which would require you to chip away at it slowly. This will give you time to think if it’s the best idea to buy that thing you’re about to buy.

        3. Automate Everything

        Willpower can be a huge downfall to paying off your debt. By automating your bills each month, you will ensure that willpower isn’t involved.

        4. Plan Ahead

        Getting out of debt will require some sacrifices, but with enough planning, you can make it work.

        For example, if you know that you have a friend’s birthday or family dinner coming up, plan ahead for the costs. Whether you need to cut back on spending the week before, pick up a side job, or meet them after dinner, do what is needed.

        5. Live Cheaply

        The only way to get out of debt is to make some sacrifices on your spending habits. Find ways to save money each month so you can apply that amount to your outstanding debts. Here are some ways to save money each month:

        • Live with roommates
        • Cook dinners and prepare lunches for work instead of eating out
        • Cut cable and choose Netflix or Amazon Prime
        • Take public transit or bike to work

        Finding the Lowest Interest Rates

        The higher your interest rates, the harder (and longer) it will take you to pay off any debt.

        If possible, you want to find ways to lower your interest rates to help get out of debt quickly. Here’s how you can get started:

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        1. Maintain a High Credit Score

        Your credit score will have a large impact on your ability to refinance your loans and receive a lower interest rate. If you have a low credit score, it’s unlikely you will be able to refinance your loans. Use these credit tips to increase and maintain an excellent score:

        • Never miss a payment
        • Don’t exceed 30% of your credit limit
        • Don’t sign up for more than one card at once
        • Limit hard inquires, like auto-loans and new credit cards
        • Monitor frequently with free credit-tracking software

        2. Find Balance Transfer Offers

        Start by opening a free account on credit.com. Credit.com offers you the chance to open a free account and see what type of balance transfer offers you can receive. Some of your existing credit cards might already have 0% or lower APR balance transfer offers available.

        Contact each of your credit card providers to ask about lowering your rate for a one-time balance transfer offer[2].

        If you do take advantage of this option, make sure that you use a balance transfer and not a cash advance. Cash advances have a ton of high interest fees (15-25%, depending on your credit card) and will only compound your debt problem.

        How to Get Rid of Debt Forever

        Setting up a plan, removing temptations, and getting the lowest interest rates is the first step to get out of debt.

        1. Keep Monitoring and Adjusting

        Once you have a plan, don’t get comfortable. Track your debt payoff plan and make the necessary adjustments when needed.

        Monitor your credit scores with a free site like CreditKarma. The higher your credit score climbs, the more likely you will be to secure a new, lower-interest loan.

        2. Earn More Money

        There are only so many ways to save money. Instead of clipping another coupon or making sacrifices for your morning coffee, find ways to earn more money!

        Think about it…it is much easier to find ways to earn an extra $1,000 per month than find $1,000 to cut from your budget.

        Here are some examples of ways to earn more money:

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        Talk to Your Boss

        Have a conversation with your boss about current salary and/or commission rates. If you’re not satisfied or want a change, don’t be afraid to look around at other positions. Some of them might even have a student loan debt reimbursement plan!

        Start a Side Hustle

        This could be coaching students on the weekends, driving for Uber, or taking paid online surveys. There are tons of ways to make money outside your 9-5. Now that you have a clear plan to pay off your debts, you’ll be more motivated than ever to figure out creative new ways to earn money.

        Build an Online Business

        There are so many websites and blogs that earn money from ads, affiliates, and other online products. Find your niche and get started.

        3. Celebrate Your Wins

        As you progress in your debt payoff journey, don’t forget to celebrate your wins. You need to always reward yourself for the hard work and discipline that is required to get out of debt.

        While you shouldn’t celebrate so big that it increases debt, make sure to factor in little rewards to keep you motivated.

        4. Set New Financial Goals

        Eventually, with a plan and these steps, you can rid yourself of your debt. Once you do, make sure to celebrate your monumental achievement, but don’t stop there.

        Now, you can focus on acquiring wealth and increasing your net worth. Set new financial goals so you have a new target to aim toward. Here’s how to set financial goals and actually meet them.

        These could be anything now that you are debt free! Think about where you want to travel, buying your first home, or saving for your future retirement. Just like before, make sure that your goals are specific, measurable, and achievable.

        Conclusion

        Congrats, you can now set a plan in motion to finally pay off your debt quickly (and hopefully forever)!

        Remember, if you want to get out of debt quickly, it’s not always easy. Just like any big goal, there will be sacrifices, challenges, and problems to overcome.

        More Tips on Getting out of Debt

        Featured photo credit: Pepi Stojanovski via unsplash.com

        Reference

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