Without balancing the books, your business will fail. And looking for ways to cut costs can be easier and faster than trying to boost sales. As the saying goes,
‘A penny saved is a penny earned’
Here’s how to save your business money.
1. Set an example
One of the best ways to help your business save money is to set the example for the rest of your business. If you’re lapse with expenditures, your colleagues will likely act similarly. Social influence is a powerful tool. Use it mindfully.
2. Hold less meetings
Meetings are a productivity and financial-sink for many companies. According to Harvard Business Review,
“Problems ensue when meetings are scheduled and run without regard to their impact on both group and solo work time. Often groups end up sacrificing collective or individual needs—or both—by default.”
Meetings done right will move projects forward and help your business grow. But done poorly, meetings become a thorn in the side of your business. Reducing the number of participants in a meeting is a tool Amazon use to keep things lean and productive. The rule of thumb they use is that if it would take more than two pizzas to feed everyone in the room, there’s too many people.
3. Move away from traditional marketing
It’s expensive to run ads on TV and in print. Instead, turn to low-cost forms of marketing. New forms of digital marketing are also comparatively low-cost and can provide large pay-offs. For example, effective social media marketing can be done in just 6 hours a week, and the cost of a Facebook and Twitter account is zero.
4. Consider remote working
A workforce that works remotely can offer many benefits. Firstly, employees are increasingly choosing remote work because of the improved work-life balance it provides. There are also cost-saving benefits for the business, including a more flexible work force and lower costs for office space.
5. Work to better understand your customer
If you don’t understand who your customer is or what they want, you’ll waste money at all levels of your business. You’ll create products that aren’t valued, and you’ll spend money marketing to the wrong people. Instead, define your ‘buyer-personas’, and then integrate your business strategy to provide them value. According to HubSpot marketer Pamela Vaughn,
“Having a deep understanding of your buyer persona(s) is critical to driving content creation, product development, sales follow up, and really anything that relates to customer acquisition and retention.”
6. Buy supplies in bulk
Typically, things are cheaper when you buy them in bulk. Unless you are a new start-up worried about short-term cash-flow, buy in bulk to make savings. Consider everything from stationary to bigger purchases like software and business laptops. All frequent-use items should be bought in bulk to save your business money.
7. Get the best deal possible
It’s often a good idea to negotiate to get a better price. This might include your internet supplier, catering services or software services.
Of course, negotiation itself is an art form. If you’re inexperienced with it, start slowly and learn from the best. Consider what services and products your business uses, and how best you can negotiate with suppliers for a better price (whilst retaining a good relationship with them.)
8. Stop paying for underperforming employees
An employee needs to be effective in their role. If they aren’t, consider one of two things: Either end their contract, or invest your efforts in helping them perform better. Becoming over-sentimental won’t help your business, and will take its toll on the morale of other employees. Here’s some great advice from Dick Grote at the Harvard Business Review:
“Whatever your decision, put company interests first. For months you’ve probably put up with less-than-stellar performance in hopes that the situation would somehow correct itself. Now that the end is at hand, plan the transition so as to do the least damage to company and coworkers.”
9. Use tech to save on bills
There are some excellent technology solutions to save money on utilities. Using programmable thermostats will help you save heating costs, and smart light bulbs can help you save on electricity costs.
Small, consistent fixed costs like utilities are a great opportunity to save money long-term. They can also have the added benefit of making your business more eco-friendly.
10. Instead of benefits, have perks
It can be cheaper and more effective to provide perks to employees instead of benefits. That’s because, when done right, perks can have a greater perceived value than the equivalent benefits. Often, the value is in the utility and perceived thoughtfulness.
An example of this is free snacks or free Spotify accounts. These might come at minimal cost to the business, but make employees feel like they are appreciated even more than the equivalent pay-rise.
11. Volunteer to give a presentation at industry events
Giving a speech is a great way to build your brand at low cost. Consider getting maximum value out of it by also recording your speech and offering it back to website visitors. If you are new to the industry, offer to give speeches for free and target up-and-coming industry events.
12. Guest posting on other blogs
This is similar to giving a speech at an event because it is another ‘value-exchange’ with someone in your industry. Guest posting on other blogs is low (or even zero) cost to each parties, but provides businesses access to each other’s audiences. It can have the added benefit of providing SEO ‘power’ to each other’s websites, too. Here’s Neil Patel’s take on guest blogging:
“You want authority, qualified traffic, relevant links, motivated leads and sales in your business. Well, guest blogging can give you all of these and so much more.”
13. Use software tools to ‘do it yourself’
There are many excellent tools for creating online assets for your business. And using tools can be a lot cheaper than hiring someone else to do it.
14. Buy things secondhand
Yes, buying secondhand applies to businesses, too. Of course, don’t buy things that break. But where possible, pick-up second-hand equipment. Used office equipment can be an important cost reduction for a start-up.
15. Track all expenses with software
Every business must keep track of its expenses. But don’t consider this an extra aggravation to keep your accountant happy – it’s also a key tool for saving money.
Tracking expenses with technology, like Turbine, can help save money with accounting fees, but also by making it easier to document expenses and save money where it counts.
16. Improve productivity
If your business gets more done in less time, you’ll save money. It’s that simple. According to KashFlow, improving working conditions can have a strong impact on productivity. Another way to increase productivity is to invest in staff training so that employees are better trained to produce more in a shorter timeframe.
17. Leverage your own network
Hiring new employees can be costly. Instead, consider turning to your own networks to find the right talent. Posting a job listing or using a recruiter will cost you but asking friends is free.
If you feel like your network isn’t strong enough to help you, maybe it’s time to grow it. A few key changes to how you interact with people can make all the difference. Dorie Clark at the Harvard Business Review explains one strategy,
“One of the fastest ways to build a connection with someone is to find a commonality you share with them (your alma mater, a love of dogs, a passion for clean tech). That’s table stakes.”
18. Use freelancers
As a new or growing business, it can be difficult to find consistent work to justify hiring someone. There’s obviously a big cost to paying someone who hasn’t got work to do all of the time.
Freelancers are a great way to have a flexible workforce. Turn to websites such as Elance and you’ll be able to get the help you need without the on-going cost of an employee.
19. Go paperless
There’s an immediate cost when you buy something physical – paper is always going to cost money, as is the stationary that goes with it. However, software can create infinite amounts of digital documents with minimal cost. There’s the added benefit that you don’t need space to store digital documents, so you can search and organise them easily.
According to Madeline Bennett at The Telegraph,
“In 2014, Gartner estimated that the cost of filing, storing and retrieving paper for US businesses was between $25bn and $35bn. This cost only hints at the complexity and pitfalls involved.”
20. Be more efficient with space
It costs money to rent or purchase office space, so why not make the most of it? A great way to save costs is to have multipurpose rooms. This might mean that your conference room is also your break room.
Collaborative workstations are another great way to save space and have the added benefit of fostering stronger communication and culture. Also, look into sharing workspace with other companies by working out of a co-working space. If you typically only need a conference room twice a week, it makes sense to only rent one when you need it.
21. Maximise word-of-mouth marketing
Word-of-mouth marketing is perhaps the cheapest form of marketing there is. It happens when a customer loves your product so much they convince someone they know to buy it as well.
To get the most out of word-of-mouth marketing, make it easy for customers to review and share how much they love your product. Nudge customers toward leaving reviews on sites like Yelp or Google and make sharing your content on social media easier.
Keith Queensbury at Harvard Business Review says,
“Research has shown that this “electronic word-of-mouth” is seen as reliable by consumers and significantly affects a firm’s perceived value.”
22. Use interactive calendars
It takes time to find out the availability of colleagues. To combat this, simply have shared and open calendars.
Then everyone can see when a good time is for a meeting or call. It will also help managers to balance the workload of their teams. This improvement to productivity will cut business costs overall.
23. Improve company culture
Working to improve your business culture can be the best investment of time and money. A happy employee is a productive employee. And small changes can reap big rewards. This might mean more company perks or making the workspace more fun and interesting.
It’s important not to overlook culture or think that it doesn’t help the company’s bottom line. Zach Bulygo explains it well on Neil Patel’s blog,
“You want happy employees because happiness means more productivity. And when a business is more productive, that means it is working faster; and when it works faster, it can get a leg up on the competition. So it’s worth the investment for companies to build and nourish their culture.”
Saving money will grow your business quicker
Cutting costs is an important part of running an effective business. But don’t see this only as an exercise in cutting back – many of these cost cutting ideas will have other positive effects. For example, using technology to reduce energy consumption will save money and have a positive impact on the environment.
It can also be both easier and quicker to cut costs than to increase revenue. Developing a new product, or entering a new market takes decision-making and work, but calling a utility company to re-negotiate your contract can be done in less than an hour.
Cutting costs is key for business success. If you ignore it, you’re shooting yourself in the foot. It’s that simple. Be savvy and apply the ideas in this guide to cut costs and help grow your business.
For more on saving money by going paperless, download our guide here.