According to an article by Michael Flint entitled “Cash Flow: The Reason 82% of Business…
In an uncertain economic environment where every dollar counts, the most marginal increases in revenue and overall business costs can have a significant impact on the bottom line. Forward-thinking businesses strategically cut unnecessary costs in a way that maintains market strength without sacrificing the quality of marketing, operations, and business relationships. Positive cash flow is critical to maintaining solvency and cutting back costs in tumultuous times can help you stay in the black. To that end, here are seven simple ways to reduce business costs.
Ditch Your Landline
Traditional landline service is often an expensive and sometimes unnecessary business cost. Small business owners who opt to use cell phones voice over IP, and virtual phone lines (Skype) instead of a traditional landline can reduce their business costs. Do you currently have the best cell phone plan offered? If you signed up for a plan years ago, it may be time to investigate better market offerings and alternatives.
Reduce Advertising Costs
With more customers online than ever before, advertising and marketing does not have to be an expensive investment. While its important to maintain effective traditional methods that yield a solid ROI, it’s also important to investigate cheaper alternatives. From building a customer e-mail list, to developing a referral network, to increased use of social media and blogging – there are many practical ways to reducing advertising costs while simultaneously increasing traffic and visibility.
The cost of paper, ink, mailing supplies, postage, etc., may seem minimal, but the cumulative costs can yield significant unnecessary business expense. Going paperless by weeding out all unnecessary and duplicative printing, transitioning to a digital invoice and vendor payment system, and organizing all important paperwork on your computer instead of a filing cabinet can help you reduce some of the most common recurring business costs. Retain your clients with email marketing and abandon mailing coupons and mailers to cut down on costs even more!
Stick to a Business Budget
Sticking to a business budget goes hand in hand with reducing business costs. Although two-thirds of owners agree they are responsible for cost control, many don’t have monthly budgets, according to a report of small business owners by the National Foundation of Independent Business. Without a clear idea of monthly financial in flows and out flows it’s impossible to formulate a realistic budget. A business budget can be a very powerful tool that you can use daily to manage cost controls.
Reduce Software Expenditures
How many applications do you have that you truly need? More likely than not, there are multiple subscriptions to software providers that you never really utilize. You can reduce your business costs by only purchasing the software you really need and avoiding the cost of purchasing other apps, plus any upgrade fees necessary to keep the software current. Open source software alternatives and cloud computing are also effective ways to reduce your software expenditures.
Cut Supply Costs
If you’re running a business that regularly makes supply purchases, getting the best deal on supplies can oftentimes make a huge difference to company profits. If you’re a business owner, you need to be constantly evaluating alternate sources, making price comparisons, and searching for the best discounts. One way to increase your odds of getting discounts is to make yourself popular with suppliers and other businesses by paying your bills promptly. Co-opetition – pooling your resources with other companies – is another way to reduce supply costs. This concept can also be extended to other areas of your business such as advertising and office space as well.
Buy Used Equipment/Furniture
Why buy luxurious brand name office equipment and furniture when the vintage no-name offerings often look and function the same? Businesses claim to save up to 60% in costs merely by purchasing used office equipment like computers, faxes, phones, and printers. Scroll through Craigslist, check out thrift shops, search the classified section of your local paper, and seek out online auctions like eBay to get everything you need at a fraction of the cost.