If you’re a business owner, this year has probably brought its fair share of challenges. As the pandemic rages on, consumers face high unemployment and a reduction in their disposable income. Especially for companies in heavily hit industries like foodservice and hospitality, finding creative ways to improve the bottom line without the support of additional revenue is top of mind.
And better yet, savvy companies will learn how to cut expenses without impacting the overall customer experience. If you’re hoping to improve your outlook for 2021, here are some simple ways to reduce your spending without sacrificing quality or reputation.
Today, companies leverage cloud computing power to cut both capital and recurrent costs associated with IT services. Cloud computing technology eliminates the need for you to buy and maintain costly servers. Besides, you don’t incur expenses for continuous software updates. Therefore, by leveraging cloud computing power, you’ll always gain access to updated iterations of the business applications.
Furthermore, you’ll have flexibility in terms of increased bandwidth or storage capacity for your company’s files. Your cloud service provider also incurs data recovery costs, thereby minimizing your business’s data recovery expenses. Ultimately, cloud computing technology is a tactic worth investing in as it can cut your business costs in many ways.
Also, you may not need to have an IT person full-time in your company as many services can be obtained fraction of the cost and your capability expand.
The cost of paper, ink, mailing supplies, and postage may seem minimal at times, but it can add up to a large business expense. Going paperless by not printing unless necessary, transitioning to a digital invoice and bill payment system, and filing all important paperwork on your cloud server instead of a file cabinet can help you reduce some of the most common recurring business costs.
More importantly, this is more efficient and your business will have more time to focus on business development.
Nowadays, outsourcing is a common tactic that businesses use to reduce their costs. However, this tactic works well when your company has work that requires experts with unique abilities. As such, instead of hiring a full-time worker who will need other overheads like benefits and an office, you can outsource the task. In the end, you’ll only pay for services rendered without incurring benefits and office space costs.
Most business owners believe outsourcing works for only big companies and not for SMEs. This is wrong. Mostly outsourcing helps SMEs to have expert services for a small cost in terms of Digital Marketing, HR solutions, IT consultants, Accountants, and Tax experts.
Optimize your social media presence
Not only are traditional methods of advertising, such as radio and TV, costly, but we’ve also found they can be far less effective than digital strategies. Unless you have a niche audience that responds particularly well to traditional advertising, we recommend creating a digital advertising strategy.
Paid social media advertising is cost-effective and reaches a diverse group of people. For example, in our experience, the cost-per-click of an Instagram ad is usually $0.50 to $1.00, a reasonable cost for almost any business. But truthfully, you don’t even need to pay to reap the benefits of social media advertising. Although it takes more effort and careful planning, creating internal content, sharing curated content, and engaging with your followers will allow you to create brand awareness without spending a lot of money.
Employ Remote/Flexible Working
Having employees work from home greatly reduces business spending as well. Considering the money you could save per month on rent, electricity, cleaning costs, and supplies alone, remote work is an effective and well-received way to cut your expenses. If you decide to go this route, ensure that your company has the infrastructure and training to support a work-from-home environment.
This may lead you to save office rent, electricity, Internet and other fixed cost and improve employee efficiency due to the motivation of staff.
Businesses can easily overspend on inventory if they don’t have the proper systems in place to keep track of their inventory. An inventory management system is an effective way that will enable you to make sure that you are spending only what’s needed.
Try to maximize the inventory management and which will help you have more bank balances rather than funds stuck in the inventory which take so much time to sell. Also, evaluate the need to inventory facilities, and in case if you can switch to a rented warehouse evaluate the options.
Be mindful of the energy consumption
Power bill is one of the top expenses businesses ignore to work on. From improving energy consumption habits such as encouraging your staff to turn off all lights and other electrical equipment in their office when they leave to adopting green energy and energy-saving equipment, there is so much you can do to save money from your electricity bill.
Ask for a discount
Most of the businesses offer discounts for small and medium-sized businesses even though they don’t advertise it. So, make sure to ask for a discount or opt for their newsletter or keep an eye on their social media pages and jump on the opportunity when you see an offer or a promotion happening.
Review miscellaneous expenses
Miscellaneous expenses often go unnoticed and generate unnecessary waste within your company. Ask yourself where exactly your money is going and how much of it you’re spending. Miscellaneous spending can be going to anything, whether it’s supplies, computers, or coffee you buy every week that’s piling up in the break room. Review these expenses every so often to ensure the resources you’re spending money on are truly necessary to your success.
How Crevaty, can help you
These are only a few ideas that you can use to reduce business expenses. With better planning, high control, and a little imagination, any business can find ways to cut down costs in their business and save money. If you need more help feel free to get in touch with us for a consultation session to understand how your business can save money.