Running a business is no small feat, and part of the process involves regularly managing how your money is being spent. Even if you do well one month, you may be surprised how high your expenses are. These high expenses take their toll: They can lead to you having a reduced net income for the year, which, in turn, can cause you to not take on projects or marketing strategies you’d want to commit to like developing a personalized email campaign or creating an affiliate marketing strategy.
If you’re noticing that you’re spending more money than you’re making, it’s high time to take a close look at your business and begin cutting unnecessary costs. You should consider doing this even if your business is doing well—unnecessary costs can be a burden that keeps you from reaching for other high-level goals. Here are some common costs you should consider taking an ax to this year:
10 Top Cost Cutting Areas For Your Company
1. Relying On Paper
Printers cost a lot of money every year, from the paper that goes into them to maintenance costs and money spent on ink. Furthermore, the production of paper requires storage throughout the office that takes up space.
Consider removing the majority of the printers throughout your office; instead, depend on cloud- based applications for communications, invoices, and documents. Online signature services will even remove the worry of keeping documents confidential, allowing access only to specific recipients to keep business moving swiftly without paper jamming up your finances.
2. Relying On Staff Rather Than Contractors
Smaller positions don’t always require full-time help. If you have smaller projects that require assistance, you should instead opt for freelancers or contractors to join your team. Their hourly rates might be higher than those of a full-time employee, but they are only going to be with your company for the duration of a project. Furthermore, you should spend on quality, not quantity—making the most of the content you are contracting for.
3. Always Seeking Out-Of-House Help
While contractors and freelancers are helpful, some businesses constantly rely on them. Or, for larger projects, businesses might decide to outsource their work elsewhere instead of looking to their own workers for help.
While this can save some time in the short-run, it’s also going to incur costs quite rapidly, leaving you with a massive invoice for something that could have been handled in-house by part- and full-time employees. However, if you’re ever in a crunch, consider hiring a sole freelancer, not a whole agency.
4. Paying For Software You’re Not Using
If you’ve ever had a service you’ve forgotten you’re signed up to, such as Planet Fitness or Amazon Prime, you know how quickly those costs can add up. Like this, companies not utilizing the software they pay for are losing out on a significant amount of money—money that could be readily used elsewhere. If you have software and technology subscriptions that are going unused, consider looking for free online options or cloud-based services that provide similar benefits.
5. Outdated Technology
Old technology does more than occasionally break down. Most old appliances and technology use more electricity and energy than modern devices, taking money out of your wallet.
Consider opting for green energy wherever possible. Not only is it good for your company’s finances, but it can be implemented as part of a business-wide “green initiative.”
6. Always Buying New
Not every product you buy for your company has to be right out of the factory, unopened in its original box. Whether you’re buying in bulk or need a specific item, consider shopping around for slightly used items. Obviously, you’ll have to use discretion about what you need to purchase, but buying used can cut some basic costs that can be directed to another part of your business.
7. Thinking Top-Of-The-Line Is Your Only Option
Not each product or service your business buys and invests in has to be top-of-the-line. Truthfully, you can sometimes receive a similar product or service at a cost slightly less than what the biggest brand name is offering.
Even if you can’t find a price much different, consider reaching out to a company. You may be able to create a collaborative partnership that allows you to receive their services for cheaper than usual, all while providing them with a service of your own—barter.
8. Aimless Advertising
No matter what that one advertiser you know might say, outbound marketing doesn’t work like it once did. Rather than budgeting for ads in print media and on television, radio, and billboards, you should be directing those costs to efforts that work in the modern age.
These often include cost-per-click and cost-per-action, which will usually manifest through social media marketing, Google SEM, and affiliate marketing relationships. Rather than spending money with little return, put your budget somewhere it pays off.
9. Unused Office Space
Office space regularly unused is a total waste of money. If the location you’re in is too big, consider moving into a smaller office that goes for less rent; if you have a part of your office that remains unused, consider renting it out—if your contract allows for such a thing.
Moreover, in the time of COVID-19, many businesses have transitioned into a work from home model. If your business has done the same, it might be time to consider doing it full-time. Eliminating that rent cost altogether would save your business a lot of money each year, all while providing your employees with the flexibility to work wherever they want to.
10. Not Keeping Track Of Expenses
The biggest mistake you can make as a business is to let money go to waste. Money can slip out from beneath you if you’re not keeping track of your finances from month-to-month. There should be someone dedicated to tracking monthly finances and expenses within your company, helping you identify how you are financially performing. If high costs are ever found, you can begin the cutting process all over again.
