10 Ways to Absolutely Slash Business CostsNovember 8, 2017
As a small business owner it is almost always a constant objective to increase profit by bringing in more business. However, many businesses overlook other measures they could utilize to increase profits, in particular expense minimization or ‘cost cutting’. So, without further ado, here are 10 valuable tips that will help you cut business costs by at least 30%.
1. Use Low-Cost Marketing Strategies
There is no point in spending big dollars on flashy advertising campaigns or public relations when you are only reaching a limited amount of people and often not converting at the percentage rate you’re hoping for.
Due to the ever-increasing popularity of the Internet more and more businesses are making the switch from traditional marketing strategies to newfound, internet-based approaches. The following Infographic from Leverage highlights just how big social media has become and the facts behind each site:
Not only will social media increase the customer reach, but it will also mean less need for other marketing strategies that consume the majority of the budget and in turn a significant reduction of total marketing costs.
2. Hiring Interns
Internships are a win-win situation for all parties involved; the intern receives highly valuable work experience in their field of study, whilst the business benefits through paying the intern a wage that is usually below industry standard rates.
Many businesses have hired interns to take care of small, mundane (such as paper filing, social media admins, etc.) tasks that would otherwise have been outsourced at a much higher price or taken up valuable time from higher qualified employees. Many businesses have attributed thousands of dollars in savings purely as a result of using an intern in this very manner.
3. Mobility is Key
The business of the 21st century is more technologically dependent and advanced than ever before, which has had endless benefits for both businesses and consumers. One of these benefits is the ability to be mobile in essentially all aspects of the business, and according to this Infographic, is a rapidly growing trend amongst today’s businesses.
Not much more needs to be said about mobility… I mean, what can you do on paper these days that can’t be done on a laptop or phone?
As a business owner it is common knowledge to know that consistent work at a lower price is more profitable than inconsistent work at a higher price. Just like you, your suppliers will most likely have a similar frame of mind and are after consistent work, even if it means selling their product or service at a cheaper price.
So what does this mean? Negotiate, negotiate, and negotiate! Don’t be afraid to approach suppliers and discuss the possibility of a renewed price in exchange for guaranteed future business, you might be surprised as to just how much you can save by simply asking the question.
5. Don’t be Afraid to Outsource
Another popular trend amongst businesses is that of outsourcing small business tasks to contractors or temp workers, rather than have full-time and highly experienced employees, who are being paid at a higher rate complete the tasks and simply clog up their time with tasks not worth their hourly rate.
Essentially, a business could outsource a task at, for example, $20 an hour cheaper than what it would cost to have a full time employee complete the same task, instead, that employee focusing on work that would otherwise be more expensive to outsource and is more complex. The underlying strategy is employee and task management; if it’s cheaper to outsource then you must go for the option that is better for you and your business.
The other issue here is that many businesses feel that outsourcing is done online and can only relate to data entry style tasks. Not true anymore with companies like Airtasker allowing for people to physically do tasks for you. We recently moved a section of our office and instead of getting our guys off their job and shifting things around, we grabbed an Airtasker for $80 to do the job. We calculated that to a saving over over $360!
6. Reduce the Amount of Meetings
Let’s face it.. Meetings are a time suck! And what is time? Recent studies conducted by Atlassian show that on average businesses will spend over 30hrs a month on meetings, of which over 50% of that time is unproductive. It is suggested that businesses use a system in order to determine whether or not a meeting is necessary. Here is an example from the Harvard Business Review:
7. Hiring vs. Buying
This has always been a major debate between businesses around the world, the decision to buy or hire business equipment. Both methods come with their pros and cons, however, it all comes down to the various factors of the situation that will affect the decision making process.
For example, a business may only need to use a shredder when it is disposing of large amounts of paper (which may only be every once in a while) so it would therefore make sense to hire a professional shredder that will complete the job in half the time and often can be hired for half the price, if not less.
On the flip side, a business uses computers everyday and it is a core technology for the business, which means it is more appropriate to buy rather than hire.
8. Learn something new
Although it is sometimes better and more cost-efficient to outsource particular tasks that are a one off or that you are not licensed to complete yourself, it can be even more cost-efficient by taking part in some simple DIY.
How are you meant to gain the skills required to complete the task? Simple, ask to be taught or research and action. This may sound extreme cost-cutting, and of course nobody wants to add more to their workload, however, the savings potential is huge if at least a handful of simple tasks are done in your own time rather than pay hundreds, if not thousands for someone to do it for you.
9. Embrace the Cloud
The ‘Cloud’ can be used in business for many purposes, all of which will save your business time, money and even office space. Cloud computing represents the most significant step in the streamlining of everyday office environment tasks since email and the computer itself. Mundane and time-consuming jobs can now be sped up or even completely accomplished by cloud software. Best of all, the cloud removes many of the obstacles to progress typically faced by groups of co-workers collaborating on a project.
Thanks to the increase in productivity the cloud allows and the smaller investment in servers required, cloud computing can save small businesses a significant amount, comparative to what they might have paid for the same functionality using traditional hardware just a few years ago.
10. Virtual Servers
If your IT is in-house, a small business owner will often spend a lot of valuable time on the unnecessary. It is also much more costly to be taking care of server hardware, IT management and network infrastructure in-house for a small business whose core specialty does not include IT. Most start-ups or small business can’t keep up with a one time or large monthly expenses to provide their IT infrastructures management and time required.
The advantages don’t only stop at cost cutting by outsourcing IT. The recent trend in dedicated server hosting and cost cutting (while increasing performance) is virtual private server (VPS) hosting. For example, If you have 5 servers in your office that only take up room, power and management, you’re able to convert your current dedicated servers into VPS servers instantly reducing operational and hardware costs.
Ausweb is a great example of a company who offers VPS hosting services, as well as cloud storage and domain registration, to entities of all size.
These are 10 steps you can take to reduce costs for your business in the short term. For all small businesses costs and cash flow are important areas that need a close eye on, dropping the ball can lead to longer term financial problems if they are allowed to fester.
Here at Business Telecom our job is to save businesses money on key yet high cost areas such as soaring phone bills and fixed hardware costs (phone systems, alarms and copiers).
Speak to one of our specialists and learn how we saved Mitre 10 Smithfield $1124 on their monthly phone bill…that’s over 12k per year!