Running a small business is not an easy feat, especially with all the expenses involved. From you being here, you have inevitably tried to reduce the expenses your small business, but have received little to no success.
In this article, I will outline 10 effective tips and tricks which you could use to reduce expenses of small business. By following this guide, you will be able to reduce business expense and instead invest that money in getting new clients for small business.
So Let’s Get Started
1. Use Technology To Reduce Cost of Small Business
The first tip we have to help reduce your business cost is by using technology to help manage your business. From providing you with business prompts, to allowing you to forecast your business, technology can be the key to maintaining your business.
In this technologically advanced world, there is always a piece of software which can be used in one way or the other to help maintain your business. But isn’t software expensive?, I hear you ask. On the internet, there are many alternatives, open-source, software which can perform the same tasks as their paid competitors so what’s not to like?
For example, word processing software can cost you a lot of money especially when taking into consideration the size of your business. Applications such as WPS Office and Libre Office provide an alternative to Microsoft Office and provide you with a similar experience. In addition to this, cloud software such as Microsoft Online and Google Docs allow you to have the same experience as you would with paid software whilst storing your content onto a remote server.
2. Explore Better and Cheaper Suppliers
Next on our list is switching your supplier, despite seemingly worthless, this can have a humongous amount of benefits. If you are paying a huge sum of money for a product which can be bought cheaper elsewhere, then what are you waiting for?
A switch not only allows you to reduce small business cost, but also allows you to sell your products cheaper, which will undoubtedly lead to more customers.
A complete win-win situation.
Brands will often be able to reduce the prices of their products depending on your business size and therefore you should look for the best options available. If you have recently switched your supplier, you should not be afraid to do it again.
Although, when you do this, please acknowledge the quality of the product you are purchasing, as you do not want to be changing a supplier to one that has worse quality products.
3. Reduce Paper and Printing Cost
The next tip which you could use to reduce small business cost is using cloud storage as opposed to paper copies. By using paper as your base resource, you will be losing money through printing documents, which could have been sent digitally for free.
Although a printer in the short term may seem cheap, is this the whole story? No. The maintenance of a printer will often cost considerably more than the printer itself. The printing industry sells their printers at a loss but receives a huge sum of money from the maintenance of the printer (Especially the huge cost of INK, a whopping $35 for something which lasts a few weeks at the most).
Switching to a digital form of storage is also an easy process. For those documents you only have a paper version of, scanning them will allow you to receive a digital copy, which can be stored securely both remotely or on a hard drive.
Cloud storage also has many different benefits such as sharing your work with a colleague who is currently abroad.
So why should you opt for cloud storage? Not only does cloud storage allows you to share files and work collaboratively on a project, but it also allows you to be able to organize your files without the need of physical folders and/or storage rooms. Not to mention the expenses saved on security.
4. Cut Cost of Utilities to Reduce Expenses of Small Business
Next on our list is utilities. This may seem petty, but in the long run, can prove effective in reducing cost of running small business.
Many tech devices will come with their energy-efficient rating and these should be checked to ensure that the device you are using does not consume huge quantities of electricity. The rating system goes from A – G where A is the best and G is the worst.
If the device you are using consumes high amounts of electricity, then opting for an energy-efficient alternative may help reduce business cost.
Bulbs are also an important factor if you have a physical store. This is because purchasing an expensive bulb may last longer whilst consuming minimal electricity, causing it to be cheaper in the long run. Switch to LED lights, if you haven’t already.
Switching utility providers may also help you to save money. Moneysupermarket allows you to compare the prices of gas and electricity from different suppliers.
5. Outsource Ad Hoc Work
Have you hired a worker who only performs small tasks or only has to work occasionally? Then why not try to outsource that. Depending on the task, it can turn out to be much cheaper to outsource, rather than having a full-time employee or even doing it yourself.
One such example is website management. A small business website needs to be constantly updated to make sure you get more customers from your website. This is something which you might be doing yourself, or might have hired someone to do it for you.
However, this is something that you can just outsource to a WordPress website management company that will take care of all the aspects of the website management for you, at a fixed low cost.
Furthermore, outsourcing has an additional advantage that the companies specialize in what they do, and they might take care of many other things as well, which you might not know about, but would be helpful. For example, in case of website management, website security is a very important task, which a small business owner might not be able to manage at their end.
6. Automate Repetitive Tasks to Reduce Cost
Automation is key to numerous businesses. Automation software will help reduce expenses of small businesses by preventing the need of you filling in form data and storing them in storage spaces which have to be secured. This is because you could use online software such as wufoo, which allows the user to fill out a form from the comfort of their own home. Once finished, the form can automatically be placed into a safe folder which only you will be able to access.
Just evaluate what all manual and repetitive tasks you have in your small business and then look for options to automate them. Every automation helps in reducing expense of running your small business.
Do note that there could be an initial upfront cost of such automation and there could be some small recurring cost as well, but the benefits accrued normally outweigh that.
7. A Website Can Reduce Expense of Small Business
The title might sound a bit funny, but this is actually true. A website not only helps in getting new customers for your small business, but it can actually help in reducing your business cost as well.
The main reason for this is fielding calls that people make to you to ask information about your business. For example, what is your address, what are your office hours, what services you provide, and so on. If all this information is on the website, people can quickly refer to that, saving you time spending in manually providing that information to each customer.
In addition to that, a website also helps in reducing marketing cost, by getting you similar results at a lesser price. For example, if you distribute your visiting cards or flyers, and add information of your website on that, then people get an option to know more about your business and then reach out to you, increasing conversion.
In case you do not have a website already, get in touch. We can help with that too!
8. Get Rid Of the Landline or Fixed Line Phone
Is a landline necessary? We all know landlines can become costly due to the high pricing from telecom companies. Small businesses can get away by using their existing cellular number or just online modes of contact such as forms and emails, both of which are free to use.
In case you do have a need for an alternate number or a landline, you can explore app based phone numbers, that cost just a few dollars per month, or VOIP phones that are equally cheap.
9. Bargain Hard to get best price
Next, we have a technique which only YOU can implement: bargaining. Don’t be afraid to bargain (negotiate the price of a product) with dealers. If you are a start-up company, then you may be able to have your goods for cheaper by just asking. Many companies will accept smaller costs as they will take into consideration that your business is new and therefore you, alongside the supplier, will benefit by reducing the price (more sales which in return results in more purchases)
10. Buy Second-hand Stuff
Last but not the least, a sure shot way to reduce your business expenses is to avoid buying new stuff and instead go for used stuff. This could be used furniture, used office equipment, and so on.
A good place to find such stuff is Craigslist. You will surely be able to find some stuff around you that you can buy.
Also, do checkout Garage sales that might be happening around you. You might be able to find some useful stuff there as well.
And finally, do explore your home too. There might be something lying in your garage that might be useful for your office.
Basically, if you can reduce the capital expense of your business, you can leverage that money in marketing and getting more clients for your business.
So which of the tips do we think is the best? There is no definitive answer from our side as it depends upon the type of business you have. So let us know in the comments which of the ten tips you found to be the most effective. If you have a tip of your own, do share with us in comments below.
That’s all for today, I hope you have enjoyed this article and have managed to reduce small business cost. Stay tuned for our next article which will be equally exciting.