5 Ways Small Businesses Can Cut Costs

• Tweet

• Tweet

I’ve always emphasized that expediting wealth creation can be done by increasing revenues or income and/or decreasing the cost or expenses. Whether an entity is a person, family or a business, cutting costs always benefit the overall bottom line.

I always recommend starting with your own self and your house. Once the house is in order, branch out and contain costs within other initiatives such as your small business, whether you run it part of full time.

In this post, our contributor has shared some of the ways a small business can enjoy a bigger bottom line through cost cutting initiatives. This list is not comprehensive by any means, but a good starting point for anyone with a business, whether a small side business or a full time small business.

Budding businesses need to maintain a frugal mentality in all aspects of business development. Here are some surefire ways to avoid costs and boost progress and productivity.

Know When to Outsource

If you don’t have a team in-house to deliver certain services make the decision early on to outsource before you have wasted any time or money attempting the tasks yourself.  Erase the salary costs of an in-house accountant or administration team by outsourcing bookkeeping services.

This will also ensure that you don’t have to waste time considering any penalties for incorrect completion of accounting documents. One-off projects like company photography and graphic design projects should always be outsourced because there is usually little need to have “creatives” on-staff in a small business.

On the flipside, know when to avoid being ripped off and keep some services within your business. Don’t be tempted to outsource marketing and publicity unless you have complete faith in the agency.

Often these companies charge large overheads and fail to liaise with you often enough. In terms of outsourcing services to overseas workers, evaluate the pros and cons before making any long-term commitments.

Small businesses often have a strong communication ethos, which can sometimes be hard to maintain if factions aren’t all working within the same environment.

Be Employee Savvy

You never want to spread yourself too thin on people power but there is something to be said for multi-skilled workers in a small business environment. If you’re hiring new staff always look for those who are proficient in other fields as they will offer your small business extra expertise and promote growth within the one salary.

If you’re in a fast moving industry where it is necessary to keep up with the latest trends and technologies don’t pay for the whole team to attend seminars. Send one person and hold your own mini-seminar for them to report back in.

In areas like marketing and social media it might be a good idea to get an intern. They will be up to date with the latest trends and strategies, eager to learn and perform and come at a low salary price.

They will also have the potential to grow with your small business as it expands into new markets. Always pay yourself last after all other employees have been paid and consider “leasing” your employees to other companies until business picks up instead of firing experienced staff.

Team cohesion is crucial in small businesses so hold weekly meetings where every employee reports on what they have been working on. Try to make business development the core of these meetings and present the latest statistics on profits and opportunities so that all employees are motivated to strive for expansion.

Get With the Program

Technology informs and influences the decisions of executives in all companies in every industry. Consider whether there is software that can streamline your processes, save you time and money and evaluate the value.

However, don’t be tempted to buy into the latest advances if your current model does what you need it to do. Don’t pay for storage or hard drives and move your information to an online cloud.

If you’re worried about security make it an internal cloud. Move towards free online conferencing systems like Skype or affordable videoconferencing options like Citrix to save on bulky equipment and connection fees.

To save on administration consider a CMS (Contact Management System) to store contact databases and make the most of calendar sharing features and diarise follow-ups for your customer base.

When considering software or websites to use regularly think about the three P’s. Technologies which track or promote progress, profits and productivity are going to be of most use for small businesses.

Shift Your Marketing Strategies Online

Optimizing your web presence is one of the most crucial aspects of current marketing in businesses. It can be much cheaper than pricey billboards or television advertisements and the great news is that it’s so easy to monitor your progress.

Always remember the importance of Google in marketing as this is where 80% of online searches occur. Be mindful of using relevant keywords but avoid competition by claiming “long-tail keywords”.

Google AdWords and Google Analytics can help you monitor your search engine optimization (SEO) success. Creating and maintaining a social media presence is virtually free (try free sites like Facebook, Twitter and Blogspot) and can lead to an immense spike in new customers.

Try and keep content uniform and medium-tailored across all platforms so that you are maintaining a social media presence in every avenue available to you. If you’re unsure about whether your online marketing is the most effective way to generate more capital, be sure to include a “call-to-action” via a link so you can track conversions.

Go Green

Not only will becoming more environmentally friendly cut costs within your business but also it is a great ethos to have attached to your name as it makes your brand seem more approachable, ethical and modern.

Start by creating a sustainability plan. Consider buying hybrid vehicles as company cars; as well as being green they may also qualify for a tax credit. Use smart bulbs, switch to programmable thermostats, seal and clean your air ducts so they are working efficiently.

Go paperless; don’t print anything unless absolutely necessary, transition to a digital invoice and bill payment system. Keep an eye on water-usage; low-flow toilets and WaterSense faucet’s increase water mileage.

Contact your utility companies because they often offer small-business owners incentives (or advice at the bare minimum) to reduce energy costs. Recycle, reduce and reuse; this includes ink cartridges, outdated computers, magazines and furniture.

Smaller appliances will also cut energy costs. You don’t necessarily need to waste funds donating to ‘green’ charities. Donating time, products, prizes and man power to beach clean-ups, tree planting drives and awareness fundraisers can be just as valuable as a publicity opportunity.

Be sure to promote your efforts both online and offline to capitalize on the benefits it will bring to your business name.