It has been a rough year for most of us.
Now is a good time to lower down business costs as much as possible.
There are smart ways to cut expenses without sacrificing the value of your products and services. And as a good entrepreneur, you have to oversee the effects associated with the cut-down.
Here are some cost-cutting ideas to reduce expenses especially for small businesses.
1. Reduce Advertising Costs
While it’s true that printed media are still important to market a business, posters, newspapers, and flyers are starting to get outdated. Cut down on printing costs and focus on digital marketing. Use social media to promote your business. You can enjoy a much wider reach on the internet so go ahead and share relevant content on your social media channels.
If you must advertise, social media advertising can be more affordable than traditional ads. But be careful though. Facebook ads can be a boon if you don’t know what you’re doing.
Be sure to do your homework before diving into Facebook ads.
2. Automate Processes
Eliminate manual processes as much as possible. Automation increases efficiency and productivity.
It limits the occurrence of errors, reduces labor-intensive tasks, and at the same time provides better visibility on every aspect of the business.
If automation of all systems is not possible at the moment, there are free tools intended for accounting, marketing, communications, and IT that are available online so take advantage of them.
3. Hire freelancers
Hiring freelancers can save you money because you won’t have to provide them with benefits such as health insurance or vacation leaves. This kind of arrangement is usually project-based so you pay them just for a certain period or a certain project.
4. Switch to Cloud Storage
Subscribe to the cloud and yes, there are free ones! Having your own hardware can be pricey especially when you have large data to maintain.
5. Review Suppliers
Maintain a healthy relationship with your suppliers.
Perhaps you can ask them for discounts as a loyal customer especially when you buy goods in bulk.
If you want to look around for other suppliers, make sure you find a reliable one. Cutting costs isn’t worth it if you have the worst suppliers.
6. Review Office Space and Location
Try negotiating with your lessor for a more modest price.
Consider also, if you can relocate to a more affordable space.
Or better yet, why not make your business 100% virtual?
This has been the new normal anyway.
A virtual business can make a huge reduction in your costs because you won’t have to pay for utilities and rent.
7. Manage Inventory
Monitor your inventories. Make sure you’re only buying and storing what you need.
There will be less carrying costs to maintain the stocks. You’ll avoid spoilage and obsolescence and your funds will not be tied up on excess stocks.
You should be able to know when is the right time to order and what items are moving fast. Aside from using a reliable inventory management software, make sure also that you audit your stocks once in a while.
8. Avoid Interests
Avoid interest expenses, penalties, and extra charges as much as possible. Pay your debts on time. If you have multiple debts, you may pay off your smallest obligation first then move on to a much larger debt.
If you use credit cards, make sure to pay what is due for the month. Remember to automate payments so as not to miss due dates.
There would always be challenges when you own a business. That’s why you need to manage your financial expenses and cut down on certain costs if needed. Take note, unnecessary expenses could have been profits so spend wisely.
Track All Your Accounts With Personal CapitalPersonal Capital lets you see all of your accounts in one convenient place. Sign up now for free.
More from my site
Latest posts by Joy (see all)
- How To Reduce Financial Anxiety - September 15, 2020
- Financial Lessons Learned From the COVID-19 Pandemic - August 17, 2020
- How to Manage Remote Employees - July 15, 2020