Intelligent small business owners are always looking for ways to improve the bottom line. While increasing revenue might be one way to do that, it isn’t always possible. Even when it is, plans to increase revenue generally take time.
If you need a faster way to improve the financial state of your business, cost savings are the way to go. With a little time and effort, a small business owner can find many ways to reducing business costs. Some of them might not offer huge savings, but when you add it all up, it can make a big difference for a small business.
Save on Employment Costs
Employees are usually one of the largest expenses for most businesses. Layoffs might be one option, but there are things you can do to save money on employment without having to let people go. As an example, you might provide your employees with various perks. If times are tough, you might need to cut back on those added expenses. Another option is to assess the workload of your employees to determine whether you really need them for the number of hours they work each week, or if you can rely on some third party business that can take some of your workload, like business telephone answering services in businesses where the employees take a large call volume.
If it does come down to laying people off, you might need to consider some alternatives. Maybe roll the responsibilities of two employees into the job of one. You could also save money by hiring online contractors to handle some of the work that may have gone to staff that used to work in your office. For some businesses, a virtual assistant can be just as good as having a person who works with you in person.
Cut Location Costs
Some businesses can save money by cutting costs on their physical location. Start by assessing your needs. Is your current business space serving the needs of your business? Could you get by with less space? How does the rent at your current location compare to similar options in your area? If you are looking for a creative space for rent in Los Angeles, you probably have a lot of options. In some other areas of the country, your choices might be limited.
Some small business owners might be able to get away from having a business space altogether. If you are a business of one or most of your staff is remote workers, you might be able to work from home. If you still need an office space, a coworking office might be a good idea.
Cut Equipment Costs
Many businesses have pieces of equipment that they cannot do without. It could be something like vehicles or laptops, or it might be specialized equipment for making products. Whatever it is, some of this equipment can be a significant expense.
Depending on the type of equipment, you might be able to save money by buying it used. Whether you are talking about a vehicle or an expensive piece of equipment, you can save a lot of money by buying things secondhand. You just need to make sure you are careful and that you have the knowledge to evaluate the used equipment. Another option is to buy your equipment using commercial equipment finance services.
Lose Your Landline
So many small businesses have landlines when they do not need them. If you have one at your business, think about how much you use it and whether it is really a necessity. If your mobile phone is already the primary line you use for most of your business, you could save money by disconnecting your landline.
For businesses that do need a traditional business telephone, you could consider switching to a VOIP system. These are basically virtual phone systems that run over the internet. It can be a way to cut costs on your phone bill. Some of these systems even allow you to run a virtual PBX that you can manage from a software application. If you are looking for free international calling and free phone service to countries including Canada, Mexico, India, UK, and more, you may want to contact your local telephone operator for more info.
Use Free Software Tools
Small businesses often find that they need a variety of software tools. If you are paying a monthly fee to use some of these tools, you might be able to save money by switching to a free alternative. You just need to assess your current usage of subscription software tools, look for free alternatives and evaluate whether you can still achieve your goals using the free software.
One example is free tools for things like bookkeeping or accounting. A lot of businesses pay for software to handle these tasks when there are free options that might have the capabilities they need. Beyond that, you can find free software for things like inventory management, productivity, collaboration and more. Many of these SaaS tools offer paid subscription options, but some small businesses can get all the functions they need from the free versions.
Assess Supply Costs
Supply costs can be another big issue for small businesses. Many small business owners find suppliers in the beginning and then they never take the time to see if they can find cheaper alternatives after that. Whether it is office supplies or materials for making products, you should compare other options to see if you can find better prices.
Even if you do not want to leave your current supplier, you could discuss prices with them. If you have found a better deal, let your supplier know and see if they can match it. Either way, finding the right supplier with the right prices can make a big difference for cutting costs. This is especially true if the product or material is something your business uses a lot.
These are just a few tips that can help a small business cut costs. If you want to go further, you should look at every expense and try to find ways to either reduce or eliminate it. You might be surprised at some of the savings you find when you dig deep into your expenses.