Every business owner needs to be vigilant about costs under normal circumstances. This is even more true this year given inflation. How do you cut costs in your business without reducing your productivity or hurting your business? Here are a few ideas.
Reduce your office supply expenses
Shopping around for better prices on office supplies can pay off, especially if you use a cost-comparison tool like Google Shopping that makes your search more efficient. Considering vendors you don’t typically use may also help because some may be willing to reduce their prices to win your business, especially this year. And don’t overlook larger suppliers, like Amazon Business, or Uline, that often beat traditional office supply prices. Lastly, avoid overbuying or stocking up on supplies right now.
Cut your facility and production costs
Make sure you’re getting the most out of your office space and real estate. Centralize or consolidate the space necessary for production and manufacturing. Lease the space you don’t need to another business, whether that’s a small office space or a larger warehouse space.
If you are leasing space, look into reducing your office footprint or renegotiating your lease. Lastly, to boost productivity, measure and optimize operational efficiency and set performance metrics for your team that reflect your efficiency goals. Offer incentives when those goals are met.
Cut costs on financial accounts and insurance
Are you paying too much for insurance premiums or fees on financial accounts? Are you over-insured, or do you have duplicate coverage? These things can drive up your costs quickly. So can high premiums. Shop for lower premiums, and ask your current provider to match the rate – without sacrificing coverage.
Consolidate bank accounts and ask your bank if they have lower fee accounts. If not, try another bank. And don’t take on debt if you don’t need to. Interest rates are too high for that right now.
Use technology to reduce costs
Technology can enhance your cost reduction strategy. We’ve seen just how effectively businesses can operate remotely. Virtual meetings minimize travel expenses, and virtual offices reduce or eliminate the need for physical space.
While you certainly don’t want to eliminate personal contact altogether, save it for the instances when it’s most beneficial. And use technology Slack, Teams, Google Workspace and Zoom that facilitate communication throughout the day to keep your team in touch with each other.
Narrow your focus
If you limit the types of services (and products) you offer and become more selective about the nature of the projects you accept, you will not only become more productive, you will also find you produce higher-quality work.
If you need to expand your focus you can subcontract the work you don’t do. The enables you to maximize your capacity, and increase your revenue while lowering your expenses.
Bonus tip: Hire an expert in cost cutting
If you find it challenging to cut costs, we can help. Not only can we advise you on ways to cut costs, we can also minimize the amount of taxes you need to pay.
If you’re looking for ways to improve your profitability, you might want to read this blog too.
