How to Cut Costs in Your Business: 5 Top Tips

Costs are spiraling, your expenses are getting out of hand, and if things continue, you’ll be out of business within the year.

What do you do?

It’s never too early or too late to start thinking about cutting costs in your business. There are a few things that you can do to bring those expenses down and keep your business in the black, including:

5.Don’t Forget About the Small Things

If you’re spending $10,000 a month on staff costs, you probably won’t care about overspending on office supplies and other essentials.

Who cares about an extra $50 or $100 when you’re hemorrhaging money?

But while they certainly shouldn’t be a priority, those minor expenses should still be addressed.

Look at how much paper, pens, pencils, coffee, cleaning suppliers, and perishables you’re buying and how much you’re actually using. Contact different supplies to see if they can get a better price or just let your current supplier know that you’re looking elsewhere.

It’s not just big businesses that can cut costs here, either.

Even as a single-person retail operation, there could be some areas where you can save a few dollars.

Look into the cost of paper, printer ink, shipping, packaging, inefficient heating/AC, bank charges, and other essentials, and save cents everywhere you can.

If you’re able to save just $1 a day on invoicing supplies, $5 on heating and AC, and $10 on ink, that’s nearly $6,000 a year!

4.Hire Freelancers

A freelance writer will charge you much less than a writing agency, and in most cases, the work will be the same.

Many agencies outsource their work to freelancers, and sometimes they outsource it to other agencies.

A friend of mine recently told me about a job where he was making decent money, but was accidentally sent an invoice that suggested the job was paying 5x more than he was earning. After some sleuthing, he discovered that his client was actually an outsourcer working through an agency that had been contracted by another agency. At the end of that line was the actual client, who was completely unaware of this chain.

It meant that everyone was taking a cut just for passing the buck, which in turn meant that the client was paying more than they should and the freelancer was getting less than they should.

Of course, not all agencies operate like them. Some of them have a very good relationship with their freelancers while others work in-house. But in all cases, it’s cheaper to hire freelancers directly.

3.Rethink Your Marketing Strategy

Many businesses are trapped in a cycle of marketing for the sake of it. They give thousands of dollars to trade magazines or local newspapers because that’s what they’ve always done. They throw money at Facebook Ads because that’s what a marketing guru told them to do.

Unless you can prove that these methods are working for you and generating a positive cash flow, they’re just not worth it.

You shouldn’t be spending $10 for every $1 in sales that you receive. It doesn’t matter how much “exposure” you’re getting. If those ads aren’t working for you, it’s time to look elsewhere.

Influencer marketing, affiliate marketing, Google Ads, Facebook Ads, YouTube Ads — there are many ways to promote your business online, and for the most part, these platforms will allow you to set a small budget and plot your campaigns carefully.

You should also think about SEO and remarketing. With the former, you’re building for the future, a future where you’ll generate lots of passive traffic and conversions. With the latter, you’re targeting the customers you already have through emails, Google Ads, and social media ads, making sure that they return to make another purchase.

2.Work Remotely or in a Shared Office

The days of traditional office blocks are fading fast. Most businesses can operate entirely in the digital realm. They don’t need a physical location — it’s basically a glorified mailbox that costs 5-figures a month.

If your staff can work remotely, then hire them remotely. Reduce the size of your premises or get rid of it altogether.

Not only will you save on rent, but you’ll also save on maintenance costs and all the other extraneous costs that go with running a commercial building.

If you want to keep an eye on your staff members and operate collectively, look into shared office spaces.

Also known as co-working spaces, a shared office gives business owners and freelancers the chance to rent their own office or desk. It’s an on-demand service, which means you only pay when you’re using it, and as you’re only hiring a desk or office, the expense is in the tens or hundreds of dollars, and not the thousands.

You can benefit from meeting rooms, office space, desks, printers, copiers, and even phone answering services, and you don’t need to sign a long-term rental contract that could cripple your finances.

1.Manage Your Time

How much of your day is wasted doing nothing? How many staff members are unnecessarily called into meetings and conference calls when they could be doing something beneficial?

I see it all the time and it’s frustrating. Staff members waste hours on tasks that are completely unnecessary just because the boss wants to feel like they’re getting value.

If you genuinely can’t find anything useful and productive for them to do, train them instead. Use that time to improve their knowledge of your industry or your products/services. Don’t waste their time just for the hell of it.

Use productivity and time management apps like Monday, Asana, and Toggl and plot jobs for yourself and your employees.

You’ll see what needs to be done and what has already been done. More importantly, it allows you to see how much time is being wasted on menial tasks and how many staff members are being called to assist or attend things that have nothing to do with them.