Friday, February 3, 2023

24 Tips to Reduce your Business Costs

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24 Tips to Reduce your Business Costs

What entrepreneur doesn’t want to pay less and enjoy more profits? Finding ways to cut costs is a daily challenge for the small business owner. The way out of the financial crisis, of course, does not only require the reduction of costs but also the necessary increase in sales without an extra burden on profits. So here are 24 ways to reduce the cost of doing business and we hope they will help you identify potential areas in your business that could cost you less. The rule that applies in every market is the following: “Anything you buy, must contribute to an increase in your income.”

  • Control and monitor your costs. This is the first step in identifying what you are paying and how much it is costing you. Write in detail. Everything. From the smallest to the largest.
  • Always do market research before buying anything. Arguably, it’s something that in the past we may not have done as thoroughly. An entrepreneur should make it a habit to do a thorough market research. Even if he does not do it himself and has assigned it to a purchasing manager, he should not leave it to its own devices. Check the employee that he did it right. You give the final OK, so you need to have the right data to make a decision.
  • Work with freelancers. In many cases, you benefit from working with a large company. Choose the right one, check their previous collaborations and try them out.
  • Cooperate on the basis of “exchange of services or products”. We see this increasingly in times of economic downturn. You provide a service to someone and they in turn provide you with theirs. It works for both of you, just make sure the other side is always satisfied.
  • Be careful with shopping for small things. There are several small purchases that a business can make and at the end of the year, when they add up the amounts, discover the size of an expense that could have been reduced by making some smart moves.
  • Reduce the cost of inventory you hold. Don’t tie up your capital when it could be invested in other sources of income generation. Nor, of course, should there be product shortages, which equates to lost sales. Proper control and forecasting is required.
  • Choose the appropriate legal form for your company. With the latest developments in taxation, some legal forms of business benefit more and some less. Before setting up your business consult your accountant or a business consultant to guide you properly in this. You don’t have to pay end-of-use tax charges that you could have avoided in the first place.
  • Reduce the cost of “traditional” advertising and improve it online. Take advantage of the new ways of advertising that the internet offers you without increasing your advertising costs. Identify where your buying audience is, find the right medium to target and start promoting your messages. E-mail marketing, social media marketing, article marketing, google ads. The possibilities are really many and the results important.
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  • Settlement with banks. We have mentioned this before in a previous article. A better settlement with the banks, whether for your personal loans, business loans or mortgages, during this period, can help you reduce the borrowing rate and lighten the installments you pay each month. Take care of it because the banks also want the loans to be paid but you also want to be able to pay them.
  • Always pay in cash after you have collected the required amount. In most cases paying cash means a better price. Do a proper planning that will allow you to set aside an amount until you have gathered what you need to make your purchase. And of course, don’t forget to always negotiate the price.
  • Minimize various micro-charges. How much money do you spend on fees like bank transactions, web banking payments, late installments, etc.? Watch out for these charges because at the end of the year you will find that the amount goes up significantly.
  • Leverage internet communication. There are programs in Skype, as well as from other companies, that enable you to significantly reduce communication costs and, by extension, travel costs. By using video conferencing, you save on tickets, meals, accommodation, etc.
  • Find a new space for your business. Many businesses change offices and go to better places with lower rent. If you are an independent entrepreneur, one step before renting your own space is to take advantage of the possibilities offered by co-working spaces.
  • Find cheaper venues to hold your events. Are you organizing seminars, presentations, workshops or various staff gatherings? In addition to hotel rooms, there are also companies that rent their spaces so that you are able to hold the event you want at a very low cost. If you often organize such events, you will find that at the end of the year the savings are quite significant.
  • You employ trainees. There are specific programs through which you can find a student to intern at your business. If he is suitable, which you will find on the job, you have him in mind for possible future employment.
  • Reorganize your business staff. Set specific goals for staff and support them to achieve them. Measure their productivity based on results. Conditions may be very difficult in the market, but the survival of your business depends on the dedication, hard work and above all, the results that your employees will achieve. While the rest are cutting salaries, you give more (bonuses and rewards) to those who are proven to be the most efficient. Invest in their education. Your investment will pay off.
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  • Reduce power consumption. How many actually turn off their devices when they’re done working, or have they replaced the light bulbs with more energy-efficient ones? There are many instances for a business where it can save money. Train your staff to become more environmentally conscious.
  • Leverage cloud computing. Instead of having servers in your office, you can take advantage of cloud computing. There are SaaS applications that save you the hassle and cost of ownership and maintenance that will benefit your business pocket in the long run.
  • Virtual administrative support. There are companies that provide virtual administrative services such as secretarial, telephone, etc. Another company holds your call center and your communications, supporting you in this way without hiring an employee and thus reducing your expenses.
  • Ask a family member to help you. One more reason to love our family more! In many family businesses, most of the time there is a member or a relative who could help you with a certain activity.
  • Make good use of your time. The smarter and wiser you manage your time, the more time you have to think about the future. Your time costs far more than that of any other employee in your business. Therefore, you realize that if you don’t invest it properly, you automatically lose money and opportunities.
  • Incentivize your customers to talk about you. Instead of spending large amounts of money on marketing, focus on your good customers. Incentivize them to promote you at every opportunity. It costs less and has better results.
  • Do co-marketing with other companies. Do marketing actions with a company that has a similar and not competitive activity. You save significant amounts of advertising this way.
  • Printing Cost. Print on rough (or economy) print to reduce ink consumption. Even on the front or back of the paper. If you need better prints, consult with a printing company. In many cases, it costs less than printing on a laser printer. 

The above are some ideas and ways to reduce the cost of your business activity. But, keep in mind that the survival and growth of your business does not depend on this alone. The secret to being sustainable in anything you decide to do is for the income to be greater than the expenses. So simple. As long as you maintain this relationship between income and expenses, you will be safe against anything that comes up. 

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Good luck!

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