7 best ways to cut unnecessary expenses in your business
In today’s constantly turbulent, uncertain economy, every cent counts.
Knowing how to cut unnecessary expenses can prove to be a saving grace when it comes to creating a business that thrives in such an unstable environment.
If you run a business, expenses are inevitable. You can’t run a business without more than a few operating costs. While you can’t run a cost-free company, you can lower those costs and by doing so, maximize your profit.
The more efficient you are in running your business, the more likely it is to last. Business smarts are a lot more than shaking hands, landing big fish clients, or even creating quality products or services. Ensuring you get as much value as possible when you spend money is a skill in and of itself.
It’s easy to assume “cutting expenses” entails ordering cheaper supplies, firing staff or paying them less, and being as fiscally frugal as Scrooge McDuck. This couldn’t be further from the truth.
Simple, effective strategies that focus on getting the best out of what you’re already spending are a much less negative way to go about this. Simple, progressive policies and changes like the ones we’ve outlined below can go a long way toward this.
Most effective ways to cut expenses for your business
No two businesses are the same. Every business requires different solutions to its unique needs.
Unless we’re talking about cutting expenses.
There are a few basic techniques most businesses fail to consider as their expenses quickly balloon out of control. The vest business knows that cutting expenses doesn’t require wholesale cuts, but rather a target, nuanced approach.
The list we’ve designed is sure to help you identify the right solution for your business.
1. Use and optimize software solutions
Technology is the most effective way to cut unnecessary expenses in your business. It may sound obvious, but it can be easy for businesses to be set in the way they do things.
Not only is that attitude antiquated, but it’s just plain unproductive.
Given the rapid rate of technological development, there are a host of solutions to problems you didn’t even know you were having.
It definitely pays off to read more about the type of tools you may need. Educating yourself on these subjects will make your decisions more informed – even if you don’t learn the technical aspects of how they work.
From Skype to Asana, Google Docs, and Google Drive, it’s important to utilize software solutions whenever and wherever possible. It’s just as important to make sure you don’t cover your business in a digital tangle of various software that does the same thing.
Or just as bad, different bits of software that don’t work with one another.
If possible, opt for software that offers an “all-in-one” solution. That will save you a lot of headaches down the road and prevent you from having to figure out which tool integrates with what.
Remember, technology should always be used to assist and accentuate the human components of your business. Eliminating that aspect of your business is the last thing you or your customers want.
2. If you travel, travel efficiently
Travel can be one of the most costly parts of running a successful business.
Not to mention the headache of planning and organizing all the little details that go into it.
Reducing travel is definitely something you need to focus on (replace it with solutions like Zoom and Skype, if and where possible).
Where you can’t avoid traveling, it’s important to make sure you waste as little time AND money as possible.
Utilize a corporate travel policy template solution to automate and simplify this process for you. This is great for speeding up your travel organization and detailing various travel expenses as well as informing your employees about what they’ll need to know for their destination.
3. Go paperless
Going paperless is one of the simplest and most directly environmentally friendly ways to cut costs in a business.
It may seem infinitesimal, but the overall cost of paper can be staggering when it comes to your business’s expenses.
In today’s highly tech-integrated world, not only is paper wasteful and unnecessary, it slows down various other aspects of your business. From an employee’s standpoint, paper means manual printing, organizing, and wasted storage space.
One estimate by Record Nations reports that as much as $8,000 a year is spent on paper by the average business! Just as shocking, the same report estimated $8,500 for filing and storage and over $30,000 a year for a file manager.
That’s a lot of money that can be saved by simply switching over to any of the many digital CRM, CMS, and employee management systems that exist.
4. Reshuffle your employee structure
Misallocated resources are one of the most common sources of wasted money.
What’s often forgotten is that your employees are one of your most valuable resources.
If you run a business, the odds are that some of your employees are being underutilized. When you look at expense cutting, maximizing the value you get from your employees is the perfect place to start.
Utilize your experienced staff. Give responsibility and leadership roles to natural leaders and organizers. Don’t leave your personable, charismatic staff stuck in the admin. Get your creative-minded workers away from a numbers-based role if that’s where they are.
Pay attention to your team’s natural talents, and you’re sure to reap the rewards.
While you’ve hopefully avoided this issue by hiring correctly, there’s a lot to be said for making a concentrated attempt to play to your team’s strength.
Spending money with staff that isn’t suited to their roles is not only unproductive but disastrous depending on what department that person works in.
5. Modernize your marketing
If your business doesn’t have an online presence, you’re putting your business at a severe disadvantage in today’s internet-orientated world.
The great thing about this fact is that modern marketing can occur without costing you a cent. For the most part.
Facebook, Instagram, Twitter, and even TikTok are great tools a business can use to create and develop brand awareness, with little to no cost. Additionally, modern marketing is capable of using a combination of data, analytics, and statistics to give you insight into how and where to reach your customers.
While paid advertising tends to be more effective in the short run, ultimately modern marketing is more about the time and effort you put in than the money. If you’re not taking part in online marketing and prefer to use old-school radio, TV, or print advertising, unless you have a massive budget, you’re wasting your money.
6. Improve staff efficiency by removing distractions
Distraction is one of the most common sources of inefficiency and unproductivity in the workplace.
Almost impossible to eliminate and even more difficult to control in today’s tech-infested workplaces and lives, distraction plays a major role in wasteful expenditure.
Cell phones, internet browsing, gossip, social media, and loud coworkers are some of the most common sources of workplace distractions. Make sure you set policies in place to counteract this.
Doing so means you’re going to save money indirectly by directly increasing both productivity and profit.
If you’re paying your employees based on their hours and not KPIs or based on their performance, it’s vital that every hour counts.
Your employees need to be at their most productive when at work. Doing this ensures you’re not wasting money paying people who aren’t fully engaged with their work.
7. Consider remote working options
Linked to the notion of increasing employee engagement is the increasingly common notion of remote work.
Not only are there a host of benefits to be had for your employee’s satisfaction, productivity, and lifestyle, but letting your employees work from home is also great for your business’s balance sheet.
Depending on how much you’re able to downsize the amount of staff in the office, this can lead to a major reduction in the amount you spend on your premises.
Work with your team to find the best solution for them as individuals. While not everyone will choose to work from home, the amount you’ll save by moving to a smaller space can be considerable.
Cutting unnecessary expenses are vital if you want to create a business with long-term success.
Not only does unnecessary expenditure cost you money but it siphons off possibilities from your business. Money poorly spent is money you’re never getting back. It’s also money that could have been used to grow and develop your business, your staff, and your products.
Often, that’s more about small changes here and there rather than major cuts. Smart thinking and planning will not only be useful in terms of cost-cutting but in your business as well.
While cutting unnecessary expenses are important, the skills it takes to identify when and where to cut are much more important. Great businesses survive and thrive because of the versatility, smarts, and effective planning of their leaders.
No matter how you choose to go about it, these qualities should be at the core of every cost-cutting decision.