Have your business costs recently gone up? Are you worried that your costs are soon going to outweigh your profits?
In the uncertain economy that we live in, every single penny counts. And, while cutting costs may not seem like it should be one of your main priorities, it definitely should be.
It’s estimated that 8 out of 10 businesses fail within the first 18 months. While there are a variety of reasons why businesses fail, one of the main reasons is that many businesses don’t have funding to move forward.
But, how exactly are you supposed to cut down on business operating expenses?
It’s a lot easier than you think.
Check out this guide to learn how to cut down on business expenses.
1. Use a Smart Thermostat
Let’s start with something really simple and doable- investing in a smart thermostat.
While smart or programmable thermostats may cost you a little extra money up front, they’ll definitely save you a lot in the long run.
The great thing about smart thermostats is that they can cut your AC costs without comprising on comfort. If you run your business on a 9 to 5 schedule, all you have to do is dial up the AC or heat in the morning and then scale it back as the day goes on.
If you run a larger facility, you may want to consider investing in multi-zone thermostats so that each area is controlled separately.
2. Modernize Your Marketing
Many businesses still equate marketing with print ads, TV ads, and radio ads.
And, while these can still be effective, it’s much smarter to focus on modern marketing efforts these days.
Modern marketing efforts won’t just help you save money on advertising, but they’ll also help you bring in more customers. This is because these days, most consumers prefer subtle marketing tactics over in your face, print or TV advertising.
Here are a few ways you can market your business without spending a ton of money:
1. Start by understanding your target market: By knowing your target, you won’t waste money advertising or marketing to those who aren’t interested in your product.
2. Use social media marketing: Your business should have accounts on all the major social media platforms- Instagram, Twitter, Facebook, and Youtube. By simply posting on these platforms on a regular basis, you can bring in a large number of customers.
3. Engage in online discussion groups: Seek out forums and special interest groups online where your target market will likely congregate. Hop in on the discussion, and when the time is right, mention your product or service.
4. Build an email list and implement a referral program: A recommendation from a friend or family member who has already used your product or service is far more likely to wind up in a sale than any other marketing tactic.
5. Do more in-house marketing: Just because you didn’t get your degree in marketing, doesn’t mean you can’t learn the tricks of the trade. Research marketing trends for your industry, and take a whack at doing at least some of your marketing efforts in-house.
6. Encourage word of mouth: Reviews go a long way. In fact, 84 percent of people trust online reviews as much as they trust their friends’ recommendations. So, don’t be afraid to ask for reviews from satisfied customers.
As you can see, there are a lot of effective marketing tactics out there that are also cost-saving.
3. Take a Look at Your Operations
It can be extremely easy to take small, daily tasks for granted. However, these small tasks can quickly accumulate if left unchecked.
Here are a few ideas that can help you cut down on overhead:
1. Review your expenses on a regular basis: At least once a month, you should be performing a cash flow analysis.
While performing your analysis, ask yourself how much each expense is really benefiting your business. If the answer is not at all, then it’s time to cut that expense. You can also use this guide to learn how to control cash flow.
2. Buy used: Don’t waste money on new equipment or furniture unless it’s absolutely necessary. Your first solution should be to always buy used.
3. Go paperless: Digitizing your documents doesn’t just help save you money, it also helps save the environment.
4. Use association discounts: If you’re apart of some type of business association, use it to your advantage. There are typical deals offered to members, ranging from discounts on ink all the way to free car rentals.
While these expenses may seem small when you look at them on their own, you can see how they can quickly add up.
4. Remember, Time is Money
If there’s one thing that small business owners struggle with, it’s evaluating and valuing their time.
But remember, time is money, and it’s truly your most important resource. Whenever you find a way to become more productive and waste less time, take advantage of it.
This could mean outsourcing menial tasks, giving your employees more responsibilities, investing in a smart personal assistant to handle calls and invoices, or, simply calling it a day when you are burnt out and need a break to recharge.
Your time is your most valuable asset, so don’t waste it.
Are You Ready to Cut Down on Business Operating Expenses?
As you can see, there are many simple things you can do to cut down on business operating expenses.
If all of this seems overwhelming, just take it one idea at a time. Pretty soon, the savings will be obvious.
If you have any questions about cutting down on business operating expenses, let us know in the comments below. And, let us know how these ideas have worked out for you!