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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

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        Published on September 17, 2018

        How Being Smart With Your Money Leads to Financial Success

        How Being Smart With Your Money Leads to Financial Success

        Achieving financial success is not something that just happens. Maybe if you win the lottery or something, but for the average person like you or me, it comes from a series of small steps you take over a long period of time.

        With each step, you form a new smart money habit. And with each smart money habit, you build towards financial independence.

        So what sort of habits can you form to get on that path? Let’s take a look at smart money habits you can start today to get you closer to a financially independent future.

        1. Avoid being “penny wise but pound foolish”

        It’s tempting to try saving a couple cents here and there when buying small items. However, that’s not where the real money is saved. You’re putting in extra effort for something that doesn’t move the needle.

        You get the most bang when you’re able to cut down on your bigger bills. For example, finding a lower interest rate for your mortgage could save you $50+ per month. And cutting your transportation bill by purchasing a cheaper car or taking public transportation can provide large gains as well.

        So, look at your recurring expenses such as housing, transportation, and insurance, and see where there’s wiggle room. It’s a much better use of your time than trying to pinch pennies here and there on smaller purchases.

        2. When you want something big, wait

        Impulsivity can get you in trouble in most aspects of life. Finances are no different.

        It’s human nature to see something and want it right then and there. It starts as a kid in the checkout line at the grocery store, and it continues on through adulthood.

        We get an idea in our head of something we want, and it’s hard not to go out and get it right then.

        A good example is wanting a new car. Perhaps you’ve had your car for several years. It’s crossed the 100k mile mark. Maybe maintenance is due, and you’re annoyed that you need to replace the timing belt or purchase new tires.

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        So, you get the itch.

        You start digging around online, and you realize you could trade in your current car for something newer and more exciting… all for a few hundred bucks a month. Then you get obsessed.

        Here’s where you have to take a step back.

        Your newfound obsession is clouding your judgement. Rather than giving into the impulse, wait it out.

        Set a timeframe for yourself. Maybe you come back to the decision three months down the road. See if the obsession lasts.

        It might, but often, a funny thing happens. Often, you forget about it. And often, you find that the new car wasn’t a need at all.

        The impulse faded. And you just saved yourself a ton of money.

        3. Live smaller than you can afford

        You finally get that big raise. And you want to celebrate – and why not?

        You’ve been looking forward to this forever. And after all, it was all due to your hard work.

        That’s fine, splurge a little. However, make it a one-time deal and be done.

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        Don’t get caught in the trap that just because you’re now making more money, you should spend more.

        Too often, people get more money and feel like they that gives them the means to buy a bigger house, a bigger car… you know the drill. Resist.

        The fact is that living smaller than what you can afford is one of the fastest ways to build savings.

        But if you constantly upgrade as you begin to make more, then you’ll never get ahead. You’ll just build up more debt along the way and have just as little wiggle room as before.

        4. Practice smart grocery shopping

        Food… it’s one of the biggest portions of any budget. And if you’re not careful, it can be one of the biggest drains on your wallet.

        But luckily, there are a few things you can do to ensure that you stay smart with your money when buying groceries.

        Create a grocery budget

        Set a strict weekly grocery budget. When you know how much you can spend on groceries, you can then plan your weekly menu around it.

        Once you know what all you need, you can go shopping and keep a running tally as you shop to ensure you’re on track.

        I tend to do this in my head, rounding for each item. However, writing it down as you go would probably work best for most people.

        Make a list… and never deviate

        Never go to the grocery store without a list. If you go to the store with a ballpark idea in mind, you don’t have a true ide of what you need.

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        You’re not well-researched. You don’t know what the sales are. As a result, you’re going to make decisions on the fly.

        These impulse decisions will lead to overspending, which will derail your grocery budget.

        Eat before going grocery shopping

        It’s also important to eat prior to going to the grocery store. Hunger is a powerful force.

        If you’re shopping on an empty stomach, everything is going to look good. In particular, you may find a lot of ready-made, processed snacks will look enticing.

        After all, you’re hungry now and that food is easily available. So subconsciously, you may lean towards those items.

        Unfortunately, not only are those items typically less healthy, but they’re likely more expensive. You pay for convenience.

        However, when you eat prior to shopping, then you’ll shop with a clear mind. Your hunger won’t cloud your judgement, influencing you to make poor decisions like a cartoon devil resting on your shoulder whispering in your ear.

        This makes it much easier to stick to your grocery plan.

        5. Cancel your gym membership

        Now that you’re all set on your food, it’s time to get smart about managing your budget in terms of physical fitness. And let’s begin by avoiding the gym. The gym bill, that is.

        The average gym membership costs around $60 per month. That’s $720 a year.

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        Yet, two out of three gym memberships go unused. That means two-thirds of people who have a gym membership are literally giving away almost a thousand bucks a year. It’s crazy!

        I recommend seeking an alternative. One good alternative is to look into fitness streaming services.

        Streaming services allow you to stream hundreds of workouts like Insanity and p90x, right in your own home for around $10-20 a month. That’s $40-50 less a month than the average gym membership.

        Of course, then there’s the free option. The internet is full of free workouts that you can do on your own with minimal or no equipment.

        For example, there’s the Couch to 5K program, that I personally used a decade ago to ease myself from couch potato to running my first 5K race. If I could do it, anyone could.

        Then there are free resources like reddit that have limitless information on workouts. The Fitness subreddit has done all the research for you, populating workout tips and detailed workout routines for anyone to use in their wiki.

        There are several routines that require no equipment. And you can join in on the subreddit to become part of the community, making it easier for those seeking comraderie and encouragement in their fitness goals. All for free.

        It’s baby steps… And baby steps can start now!

        I’ve never met anyone that can’t stand to be a bit smarter with their money. And on the flip side, anyone can get smarter with their money. But remember, it doesn’t happen all at once.

        Begin by fighting your impulses. Prepare for the week and be smart at the store. And cut monthly expenses like gym memberships that are overpriced and you probably aren’t getting your money’s worth out of anyway.

        The devil is in the details. And the details can change your lifestyle and prep you for a financially independent future.

        Featured photo credit: Unsplash via unsplash.com

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