6 easy ways to cut costs for small businesses
How do you cut costs for small businesses? In this guide, we teach you everything you need to know to reduce your business costs, without harming your revenue streams.
When the macro-economy is in turmoil, even the smallest changes to your business-as-usual costs can make a huge difference to the profitability of your small business. Whilst of course you can hire someone to audit your business costs and make suggestions for where you can save money, you may not have the budget to hire the auditor. Here are some of our best tips to help you reduce your business costs, whilst still keeping your day-to-day output at a similar level.
How to cut costs for small businesses
- Go virtual
We’re all aware by now of the impact that COVID-19 had on almost every business’s ability to operate remotely. However, many businesses have returned to their normal business routine now, and have left behind many of the financial benefits of being a virtual company.
Invest in your remote working technology and give your employees the opportunity to work and attend meetings from home. This simple change will help minimise travel expenses and can often improve productivity as well. Make sure you have set yourself up with tools like Google Meet, Zoom or Microsoft Teams, and then your team is ready to go.
We’d also recommend instant messaging platforms such as Slack to ensure that communication doesn’t suffer, whilst people are working remotely. There are also great project management tools like Asana or Trello, that can help your teams stay on top of their projects.
- Downsize your office
If the first step is successful and you find that going virtual works well, the obvious next step is to take advantage by downsizing or even removing your office altogether.
Before you cancel your office lease completely, check in with your employees. In February 2022, 84% of workers who worked remotely because of the COVID-19 pandemic said they planned to mix working remotely and working in the office in the future. You don’t want to end up increasing your costs to replace employees that aren’t happy working completely remotely.
The next time your office lease is up for renewal, examine your space requirements, and consider moving to a smaller office, or even renting hot desks at a co-working space.
- Trade in an agency for a freelancer
One of the most expensive costs for many businesses can be the creative or digital marketing agencies they work with. Whilst working with an agency offers many benefits, sometimes the expensive cost outweighs those, especially for a small business on a tight budget.
You may be concerned that by getting rid of your creative agency, you won’t have anyone in-house who’s capable of designing your website or shaping your SEO strategy. However, you can still outsource these services to freelancers, but at a fraction of the cost of using an agency. Find anything from freelance SEO experts to graphic designers or web developers to content writers on PeoplePerHour, and discover how your small business can start running more cost-efficiently.
Top freelancers on PeoplePerHour
- Change or renegotiate with suppliers
One of the quickest ways to cut costs for small businesses is to review all of your current supplier contracts. If you’re happy with what they’re providing, but not with the price, it’s time to ring them up and start negotiating. Look for better deals with competitors, then let your existing suppliers know that you’re considering other options and see what they can do for you. If they’re unwilling to move on their price, but you don’t want to leave them, request a more flexible plan that can give you better control over your cash flow.
If you have multiple suppliers for the same service or product, try and consolidate these services to one vendor, and then request a discount for the bulk purchase. This puts you in a position of power, as it will be hard for them to turn down the extra business, as well as the risk of losing your existing contract.
- Invest in a smart thermostat
A great way to cut costs for small businesses is by investing in a smart thermostat. This can help you save money by automatically changing the temperature based on your needs.
You can programme a schedule to keep your office at the ideal temperature while you’re there, and easily ensure that it isn’t wasting energy when no one is in the office. Smart thermostats are also able to detect when someone is working late and will change its schedule to keep the office at your preferred temperature. This is a great way to make your energy consumption much more efficient and reduce your business costs.
- Hire per project instead of hiring full-time employees
If you’re looking to reduce costs, but don’t want to lose out on things like social media or content writing, it may be more cost-efficient to hire someone by the project, instead of having someone on your full-time payroll.
You may feel that running your social media accounts isn’t a full-time job. If that’s the case then you can easily hire a social media freelancer to do the job as and when you need something to be sent out. The same can be said for content writing for your blog, web development for your website, or photography for your e-commerce store.
Working with freelancers can significantly reduce your financial outlay, whilst improving your business productivity.