31 Ways to Reduce Business Costs

31 Ways to Reduce Business Costs

Thrifty small business owners aren’t cheap. They’re wise. A simple way to boost your profit is to spend smarter. Here’s a list of creative ways to reduce business costs without sacrificing quality in your marketing, various business relationships, and operations.

Marketing

Many small business owners still equate marketing with traditional print, TV, and radio advertising. Thankfully, the Internet has democratized advertising, giving small business access to a thousand new (and very effective!) ways to promote their products and services.

1. Understand your target market. In the end, good marketing is all about knowing your customers and serving them where and how they need you to. Use the channels that work best for them—and cut spending on everything else.
2. Use content marketing. Keeping a blog, publishing an ebook, or creating videos for your website and YouTube often engage your customers more than traditional advertising.
3. Use social media marketing. When done right, social media can drive not only traffic but sales.
4. Use search engine optimization. SEO is a powerful way to bring leads straight to your door.
5. Get PR. A good PR strategy doesn’t have to be expensive, but the results can be huge.
6. Become a teacher. Set up a webinar or in-person workshop to build authority as a subject matter expert while drawing leads to your business.
7. Engage in online discussion groups. Look for special interest groups and forums online where your target market is looking for answers you can provide.
8. Never stop promoting. Make sure your URL is on display on all of your business documents. Cross-promote your own services.
9. Encourage word of mouth. Don’t be shy about asking for reviews and referrals from people who’ve had a great experience with you.
10. Take care of your customers. Even if it requires spending time or offering discounts, make sure your best customers feel rewarded for their business. In addition to repeat customers, they’re more likely to become your loyal advocates!

Business Relationships

Growing a small business should never be a lonely endeavor. You can leverage your relationships for the good of your business by giving some extra thought to your interactions with vendors, consultants, employees, and other like-minded business owners.

1. Create organic alliances. Seek out ways to partner with complementary businesses, such as sharing mailing lists or distribution channels.
2. Barter. Offer to trade your services for other professional services you’re currently paying for.
3. Negotiate. It never hurts to ask your landlord and vendors for a lower rate. You can sometimes even negotiate your tax rate with local community authorities!
4. Use your employees efficiently. Rather than cut employee numbers, trim their hours, perks, and commute time (with telecommuting).
5. Hire young people. Smart, inexperienced employees offer great value for the quality of work.
6. Hire interns. If you’re willing to do some training, hardworking high school and college students are available (especially in the summer!) for low-cost labor. Some organizations will even pay their wages for you.
7. Hire independent contractors. Independent contractors and temporary employees are more flexible and don’t come with the added the cost of benefits.
8. Hire commission-based sales reps. Instead of adding a full-time employee to your team, consider finding a sales professional who will work for little to no pay and a high commission.
9. Share office space. Sublet unused sections of your own office, get a lease together with another business owner, or join a coworking space.
10. Get an emergency partner. Make a deal with another business owner to use their office in case of emergency to save on business disruption insurance, and vice versa.
11. Get sponsors for events. The next time you host an event, use it as a chance to sell advertising air time or space for another business.
12. Buy bulk with others. If you find another business that makes similar purchases, you can get bulk discounts buy buying together.
13. Get advice. Have a consultant train you on new tasks instead of hiring someone to do them—or doing them yourself inefficiently.

Operations

It can be easy to take small, daily costs for granted. Of course, the accumulation of these unchecked costs amounts to huge annual expenditures for your business. Here are some simple ways you can cut down on overhead.

1. Review your expenses regularly. Perform a cash flow analysis at least monthly, and make sure you have a handle on your expenses. Ask yourself how each expenses benefits the business. If you can’t come up with a clear answer, cut it!
2. Use association discounts. If you’re part of a business association, take note of the deals they extend to members on anything from car rentals to ink.
3. Buy used. Cut your costs by avoiding the purchase of new equipment and furniture. Recycled print cartridges are significantly cheaper than new too!
4. Go paperless. Whenever possible, keep documents digital.
5. Lower your electric bill. Shut off the lights in your office whenever they’re not being used, use laptops instead of desktops, and unplug devices at night.
6. Use cloud-based or open-source software. There are Internet-based solutions for everything from invoicing and accounting to contract signing and phone service. Modernize your office to save on expenses.
7. Get bids on everything. Compare vendors for everything from insurance to furniture. You won’t know your options if you don’t shop around, and sometimes vendors will match a lower price.
8. Value your time. Small business owners tend to have a very hard time evaluating and valuing their own hours, often their most important resource. Whenever you find a way to waste less time or become more focused or productive, you are saving your company money in the long run. Don’t invest your time in anything that can’t give you a good return.

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