Every business has overheads, but when the things you’re spending your hard-won cash on aren’t essential or resulting in an income, it’s time to slash costs. Freeing up your cash flow so you can invest in the things that will actually improve your product or service and make your company more profitable is a no-brainer – but how do you go about it?
You can’t cut wasteful expenditure until you know where it’s happening in the first place. Whip out your bank statements or run an expense report on your accounting software for the past three months, add in any annual expenses like software licenses, and actually make a list of what you’re spending where. If you’re lucky, quite a few areas where costs can be reduced will jump out at you straight away.
Other areas will require a little more digging and research as to where better options are available – and remember that there are likely new alternatives on the market that you might simply not have heard of yet. Are you paying for expensive software when there’s an open license alternative freely available? Yes, you need a telephone system, but should you ditch your landline and move to a cheaper VoIP option? Would changing your bank account type or even switching banks entirely save you a small fortune in fees? Are you renting more office space than you need? These are all questions you can’t answer until you actually do the math and research the market.
Ditch expensive consultants and upskill your employees instead
If you’re paying a fortune to consultants to perform functions you’re unable to tackle in-house, run the numbers and see how much money you could save if you were to send one or more of your promising staff members on training. Not only can you save costs, but you’ll be doing something great for your staff and boosting morale as well. And on the flipside…
Outsource non-essential functions that are taking up too much of your time
If training up other staff to assist with HR, payroll, bookkeeping or other non-core functions isn’t an option (you might simply not have the manpower or time available, for example) then at the very least ensure they’re not taking up your time. All of your focus should be on growing your business, so get affordable freelancers or professional services companies to take these off your plate. If you’re battling to keep up with admin, then a part time virtual assistant might be a great option. If it means you now have the time to bring in more new clients each month, then it more than pays for itself.
Save on your monthly utility bills
Implementing green initiatives in the office is never a bad idea, and you’ll almost certainly be surprised by just how much money you can save as a result too. Make sure your staff is motivated to save water and electricity by offering a nice little incentive, such as letting everyone go home early once a month if your consumption has gone down. Fit energy saving light bulbs, encourage a paperless work space, and partner with a proven utility management company that can handle account verification and deal with the niggly legal stuff like tariffs and bylaws that might apply in your area.
Take on an intern or two
There’s no more rewarding experience than being a mentor and nurturing fresh talent, and it also just happens to be a great way to reduce your salary expenses. As long as you do your bit to keep upskilling the individual and make sure to offer a small stipend while the person is still in training, an internship can be the start of a long and mutually beneficial relationship.
Buy used furniture and appliances for the office
When money is tight, there’s absolutely no shame in shopping around for a bargain – and your office furnishings and equipment is no exception. Aside from saving you a small fortune, it’s much more environmentally friendly too.
Let staff work from home where possible
More and more research is showing that far from hampering productivity as most managers fear, letting employees perform their tasks from home is great for both parties. Yes, you may not be around to keep an eye on them, but they’re also a lot less likely to get distracted by discussions or diversions that crop up so frequently in a busy office environment. You save money on utilities and all those little expenses that hosting someone in your building all day every day incurs, and they save money on fuel – not to mention hours stuck in traffic that do nothing for their morale.
Cutting costs always means doing things differently and being open to change. It might well be uncomfortable in the beginning, but freeing up your resources so you can grow your business is always worth it, so take the plunge.