13 Ways to Reduce Business Costs

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Running a business is a great job for most people who start them. It gives you the freedom to decide when or where you are going to work, which industry you will be involved in, and the opportunity to increase your income by a lot more than you might if working in a standard full-time job. However, on the downside, running a business often comes with a lot of costs involved. You are responsible for paying out a huge number of expenses that you may have never considered before you started running a company of your own.

While some expenses, like paying the rent or mortgage on your business premises and buying equipment for your employees to use to do their jobs are impossible to get away from, the good news is that there are lots of things you can do to be savvy about it and cut your business costs.

 

Repair, Don't Replace

In the case of an equipment breakdown, this can be quite an expensive situation for lots of businesses. If a piece of equipment that is integral to the company breaks down, then you'll need to rectify this situation in order for business to continue running as normal. However, before you rush out to replace the faulty equipment, it is worth considering if repairing it will be cheaper. You can find parts available for machinery and equipment such as these material handling equipment parts. Ultimately, this might be a cheaper option compared to buying a new, costly piece of equipment such as a forklift.

 

Rent in a Cheaper Area

If you are renting premises to do business from such as an office, then looking for a cheaper area can be a great way to keep costs down. While every business owner likes the idea of the swanky office in the city center, the fact is that these are often some of the most expensive to rent. Instead, it can be worth going for an office in a cheaper area that is less in-demand to seriously cut your monthly expenses. If you like the idea of having an address in a desirable part of town, you can always use a virtual address for communications.

 

Work from Home

If you are hiring employees to work for your business, then allowing them to work from home some or all of the time can be an ideal way to keep costs down while improving employee satisfaction and workplace morale at the same time. Over the past few years, it has been proven that working from home is a model that works well for both employees and employers. Employees often prefer it as it gives them a more flexible approach to work and the chance to avoid the commute. For employers, it means that there are less expenses to pay at the business premises as employees are not there every day using the utilities.

 

Shop Second Hand

Second hand can often be as good as new when it comes to buying the things that you need for your business. If you are just setting up, then there are lots of second-hand options to consider, especially when it comes to office furniture. Try and find businesses that are closing down or relocating and might be selling off some of their old desks, chairs, and other items on the cheap for a quick sale and a great bargain.

 

Design Your Own Website

While there's a lot of debate over whether it's a good idea to do things like designing your own website yourself instead of paying a professional, there is no denying that it can be a good way to save money on your business costs if you have a good eye for design and know some basics. And with the help of the several DIY website building platforms that are now available today such as WordPress, building your own business website has become easier and cheaper than ever.

 

Rely on Word-of-Mouth Marketing

There are lots of different ways to market your business today, but many will incur costs for your business that you may wish to avoid. The good news is that there are lots of marketing methods that are just as effective without having to break the bank. Word of mouth marketing is a great way to get new customers by turning the customers that you already have into ambassadors for your brand. There are lots of cheap, simple things that you can do to encourage your customers to take part in more word-of-mouth marketing, such as including social sharing buttons on your content or offering referral discounts and prizes. This can include offering a voucher to customers who successfully refer a friend.

 

Go Paperless

Going paperless with your business is not only useful for saving money, but it can also be a great way to reduce your carbon footprint and be kinder to the planet as a company. While the cost of paper, ink, printing, and postage isn't a huge amount, it can add up a lot over time if you are not careful. Going paperless will not only help to reduce your business costs, but it can also make organization much easier. Compared to having filing cabinets filled with paper documents, you can simply save everything digitally where it is easy to access.

 

Shop Around for Insurance

No matter what kind of business you are running, there are a few types of insurance policy that are crucial to have, such as general liability insurance, which protects your company against any claims that are brought against it. Along with this, you should also have insurance for your business premises and the equipment that you use to run your business at the very least. However, staying with the same insurance company for many years is not always the wisest financial decision. Shopping around for better deals when your policy is coming to an end can help you save a lot of money in the long run.

 

Buy Refurbished Tech

These days, technology has become more and more important for any business in every industry. Chances are that, at the very least, you and your employees are going to need laptops or PCs to work from. But buying several computers at full price is an expense that can quickly add up. Instead, it is worth buying refurbished tech instead to save money. Refurbished computers are often available at much lower prices compared to buying brand-new, and the tech is usually just as good.

 

Hire Freelancers

Working with freelancers and independent contractors can be an ideal way to save money compared to hiring full-time employees when you are running a business. Consider if you really need to hire a full-time employee for web development, writing content, and other tasks. If you only need somebody to do a few jobs per month, for example, then working with a freelancer can be a cheaper and more flexible option to consider. However, choosing the cheapest freelancer that you can find is not always the best option, as the work may not be the best quality. It's better to pay somebody once for top-quality work compared to paying somebody several times to fix it.

 

Cut Electricity Costs

Most business consultants who help business owners save money will advise keeping a close eye on your electricity use as a way to cut costs. With the price of electricity on the rise, it's even more important than ever to make sure that you are doing what you can to save money on using electricity in your business. For example, not leaving equipment turned on when it is not in use, switching lights off when exiting a room, and unplugging electronics at the end of the day might seem like very simple things to do, but they can quickly add up to big cost-savings over the course of a year.

 

Travel Less

After the COVID-19 pandemic, many business owners have realized that they do not need to travel as often as they used to. With more video conferencing software programs now available than ever before, it's easier than ever to set up a meeting with somebody in a different area, or even in a different country to the one you are in. Instead of booking flights, you can reduce business costs by using online applications for the best quality video calling services like Zoom or Google Meet.

 

Avoid Unnecessary Debt

While it is often unavoidable when it comes to borrowing money to get the things that you need for your business, it is a wise idea to avoid as much unnecessary debt as possible. Before you make a purchase for your business, it's worth asking yourself if you can afford it outright or if you need to use a business credit card or another type of borrowing. If you don't need to borrow, then it's worth avoiding it.

No matter what kind of business you are running, it's always good to figure out the best things to do to keep your expenses as low as possible and make more profit. 

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