Small businesses tend to work with tight budgets, and constantly finding ways to reduce your costs is an integral part of running a company. Of course, it is a difficult balancing act as you don’t want to reduce the quality of your products or services, as this could encourage your customers to look elsewhere. There are a wide variety of different methods which you can use to reduce operating costs, and we are going to be discussing a few of the main ones here.
Ultimately, it is worth using a variety of techniques to keep your operating costs as low as possible. And this is an ongoing battle which you need to keep revisiting in order to give yourself the best chance of staying ahead of your competitors wherever possible.
The first and most obvious way of reducing your operating costs is by embracing technology. There is new software being released all the time which promises to streamline your business and make things cheaper to run. You need to examine the different methods out there, their effectiveness, and exactly how they are going to save your business money. There are plenty of articles online which can help you to determine what your expenditures are likely to be such as this one regarding how much does a website cost. Just some of the areas which have been made more simple and cheaper thanks to technology include accounting, marketing communications, payroll, admin, and general business management.
Outsource to External Companies
In addition or as an alternative to relying on technology, you could instead look to outsource some of your services to external companies. There are a wide range of different areas in which you could do this such as advertising and marketing, accounting, IT support, and customer support. Often, the costs of outsourcing are lower than if you tried to hire in people yourself to deal with each of these different areas. Everything comes back to deciding which areas you think are going to be most beneficial to your company. You also need to ensure that you choose your outsourcing partners carefully so that you can trust that the job is being done well.
Speak to Other Companies and Get Different Quotes
Strong negotiation is one of the cornerstones of running a successful company, and without this, you could find yourself being charged more than you need to be. You can get around this problem by setting up a bidding system for all projects and other work. Get multiple quotes and you can compare and contrast them. You may even find that you can grab yourself a better deal with your preferred vendor. Of course, it is nice to build up strong business relationships with your partners, but these need to be based on a mutually beneficial understanding.
Look into Flexible Work and Telecommuting Options
Simply having desk space for a staff member can cost you a lot – what with leasing the office, paying for utilities etc. These days, more and more companies are cutting their costs by encouraging staff members to work from home or telecommute. And this can be a desirable solution for both businesses and employees alike. Of course, this doesn’t mean that you can dive into this option without fully understanding the implications. You may want to start off gradually rather than allowing employees to work remotely all the time straight away. Another option is to look into hiring freelancers rather than full-time members of staff.
Another method which you can use to help tackle spiralling operating costs is by going green and reducing your energy usage. Not only is this a good approach for your business, it is also good for the planet as a whole. This could be something as simple as replacing your regular light bulbs with their energy efficient counterparts. You could also look to reduce heating and cooling costs by installing a smart thermostat and improving your insulation. Another technique is to reduce paper wastage by making more of your communications digital and only printing when absolutely necessary. When you are implementing these kind of green policies, you need to ensure that all of your employees are on board and directly involved in following the directives that you set out for them.
Identify Your Inefficiencies
Even if you think that you are running a highly efficient operation already, it is more than likely that there are some inefficiencies which are holding you back in some way. While you may be able to identify some of these yourself, it also helps for your employees to feel comfortable enough to come to you and share some of their own suggestions and improvement methods. Even the small enhancements can all add up in the long-run. For example, if you have any subscriptions which are coming out of your account on a monthly basis which you no longer need or use as much as you should do, you should look to cancel these. You may be able to save yourself some cash by paying your invoices early every month.
Perhaps there is an issue of too many meetings being held which could have been solved in an email. Reducing your business operating costs is something which doesn’t stop with a single review. The whole point of running a company is that you are continually innovating and finding new ways to run it more efficiently. For example, while you might think that you are running a technologically advanced operation at the moment, you never know what kind of hardware and software may be created in the future to make things even better. As your company changes and adapts, you may find that you want to outsource different areas in order to relieve some of the pressure from a particular area. Ultimately, your best course of action is to undertake efficiency reviews on a regular basis to determine what is being done well and what still needs to be improved in the future.