Some Tips For Reducing Business Costs

tips-on-reducing-business-costs

Does your business need to look at reducing costs? You need to approach the problem of cost reduction smartly and methodically. This is usually achieved through careful observation of your spending and targeting the things that can be reduced or excluded from your overall budget. Reducing unnecessary cost will also increase your business’ profitability. Here are some tips for reducing business costs.


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Business expenses

First step, identify costs that appear to be easily eliminated without leaving any negative effect on your business or your customer. Start with trivialities like buying treats for people in the office like juices, doughnuts and similar. If, on the other hand, you don’t want your staff to work without these then opt for a cheaper solution.

Evaluate your staffing costs

The productivity of your business is based on direct effort your employees invest in your business. Evaluate your employees' input and see whether they could work more for the money you pay them.

If money is really tight then one way to achieve cost reduction is by offering your employees a three-quarter-time employment option that includes a reduced benefits package... At least until your business flourishes again.


Recommended reading: 10 Tips for Lowering Your Business Costs


Purchasing practices

Analysing your purchasing practices in order to identify costs may help you to get the idea about any economies you can achieve. 

Some options you can adopt are joining a quantity purchase group or buying in bulk at a discount. You can also renegotiate service contracts. You can also buy directly from the manufacturer or wholesale or even purchase equipment and furnishings from resale vendors.

Going green

A great way to save up when it comes to your office energy is definitely by going green. Some things you need to invest in in order to get a great return and one such thing is energy-efficient lighting, thermostats set to achieve greater efficiencies.

Also, properly ensure all utility meters are working correctly.

When it comes to office insulation, it is important to have it tested for its R-value (how well it insulates) and if necessary contact an insulation contractor to replace it. Speaking of insulation, don’t forget to tend to windows and doors - have your office windows tinted or replaced with dual-paned models and turn off unnecessary lighting after office hours. Also, seal any leaks that might be causing problems.

Marketing budget

Instead of going over the top with PRs you hire, opt for cheaper services. Not all that’s cheap necessarily means low-quality. Quite the opposite. There are a lot of young people building their reputation and not only may they be cheaper to hire on contracts but they may also offer more creativity.

Choose to focus your marketing efforts to your targeted audience as this will save your business’ money while at the same time increase customer response rates.

Look at how you can increase conversion on your website. Having done the hard work of getting them to your website, how can you increase the number of enquiries/leads that you can convert to sales? 


Recommended reading: Start Up Struggles: How to Cut Costs and Improve Efficiency


Office costs

Sometimes most money goes on expenses that seem small at the time. These are usually things we don’t pay attention to - phone usage, supplies, paper for copying and similar. If you monitor and control use of these cost centers you could be looking at a significant saving in the long run.

These are some areas that by monitoring and analysing your use and expenses, you can look at ways to achieve savings on their costs. 

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