Home Small Business Cutting Costs for your Business: What Steps Can You Take?

Cutting Costs for your Business: What Steps Can You Take?

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cutting costs for your business

Getting ahead in the commercial world is something that every business owner will want to achieve.

While you’ll obviously strive to make a profit, another great way to both improve your operations and save money at the same time is to look at how you can cut costs.

There are plenty of ways you can go about doing this, to give you a clearer idea of what steps you can take with your company, below you’ll find just a few examples you might want to consider.

Outsourcing Roles

A top way to save is to outsource roles that would otherwise be costing you both time and money.

Examples of these jobs are things like administration, mailroom management and your telecommunications.

There are companies out there who can handle all this for you but also work under your guidance. The added bonus is you can reduce staffing and focus your efforts on other areas.

Going Paperless

To build on the above point, you might also want to consider going completely paperless.

Not only can this help improve your processes by eliminating unnecessary paper trails, it also cuts back on resources and is overall a much greener way of working.

Going Greener Overall

On the subject of going greener, if you apply a more eco-friendly approach to your operations you can make savings in the long term.

Reducing your energy consumption is particularly good for larger businesses who work around the clock, and you can go about this in lots of ways:

  • Investing in more efficient computers, servers and machinery
  • Replacing lights and other fixtures with more energy efficient versions
  • Using less water by having low-flow toilets installed
  • Upgrading your existing fleet of vehicles to hybrid or low emissions models

Revitalizing Deliveries

It might also be that your business also relies on deliveries either incoming with stock or outgoing to customers.

This is also another area that can be quite a drain on expenses – especially if you have to handle these independently.

The best tactic here is to look at using an external courier specialist who can manage this on your behalf. You often find that major logistics firms will have deals or agreements to make your deliveries more affordable, particularly if you work with them for the foreseeable future.

Naturally, not all of these will apply to every business but you can always adjust and tailor them to suit the specifics of your firm.

Whichever you choose though, you’ll be on the right path to a more cost effective setup.

16 COMMENTS

  1. Knowing all aspects of operations in your business is the key to cutting costs. If you know the ins-and-outs of your business, you can readily pinpoint which area of the business you can cut cost. If you can do the management yourself, then do so without a need to hire management professionals. As it is a business still, you still need to include pay yourself for doing the job. That could be at least lower than what you would pay when hiring a professional. It’s tempting to NOT pay yourself, but you’ve to consider that you might want to expand, and by then you can’t be in two places at one time. That is, when the time comes, you wont have difficulty adjusting to paying additional labor because you have made a habit of paying yourself just as if you hired someone else.
    tabby recently posted…Philippine Stock market Performance a Day after the May 9 Presidential ElectionsMy Profile

  2. I wish they went paperless at my workplace as well… We keep an archive of every document there is, and we do scan everything so we have an electronic copy, but we still keep very single piece of paper, “for the archive” as the boss says. Sooner or later, we will be buried in mountains of paper! And I can’t even imagine how much money they spend on it! Not just the paper itself, but printing costs count as well.

  3. I don’t really have any more costs to cut, I work from home, so I only have to worry about the usual stuff: save on electricity (which is why I never leave my PC on, unless I use it), walk as often as possible instead of driving (save money on gas &gym 😀 ), and so on. Sure, I do splurge on some stuff, like travel &other hobbies, but as long as there’s a balance, I see nothing wrong with it.

    • Well it seems like you have a good hold on your personal finances and your spending, and that is really all you do. The more that you can say that the better off you are, and in reality having a small business is just doing these thing, just on a different a slightly larger scale. Money is money, and those little things all add up in the end, so I commend you for taking those little steps. Good stuff, and thanks for sharing.

  4. I’d add one more to your list: when outsourcing roles, look for interns (fresh out of college maybe). You would offer work to people who need it and also save up on salary costs, since you wouldn’t pay an intern what you would pay an expert. Win-win situation!

    • Well this is a very good point, but you do really have to be careful with who you entrust with your tasks or your business practices. I can think of one particular example of where this backfired for a close personal friend, and to this day he still mentions it as one of his biggest regrets. With anything, you have to be careful and know who you are dealing. I think you would be surprised how many people just run off and ditch their previous engagements. Interesting thought though, and thanks for sharing.

      • Very true. When it comes to business, it’s imperative that you find someone whom you can really trust, otherwise you risk losing everything if you put your trust in the wrong person. I don’t know about interns but I would rather find someone professional.

  5. All 4 points are very relevant. going green and investing in power efficient machinery can be very good savers in the long run. You can cut cost on many things depending upon the nature of your business. Going for joint ventures is one of the ways where you can cut on a lot of costs on infrastructure and manpower. employing freshers with relevant educational backgrounds can be very helpful as well.

  6. I just love the main idea of this article, you combined 2 of the most relevant problems of our time: money and the environment.
    I love the idea of going green. The whole concept will save tons of money in the long run (not to mention how much space you’ll save by going paperless!) and you also contribute to saving the environment (even if not a lot, but every little bit counts).

    • That really seems to be the draw that people struggle with, for whatever reason. If you can just do the math and tell yourself that you will save money in the long run, these changes are a lot easier. A lot of people just focus on that short term, though, and I cannot really blame them, but a little foresight might do them well here. Thanks for sharing.

  7. I’m running a compact home office and this has allowed me to save on many stuff. I invested on a 4-in 1 printer that could scan, print, photocopy, and send/receive fax. I don’t keep a staff and do the errands myself which are not that many. I also keep tab of my office supplies. My internet plan is a low cost plan but so long as it allows me to send and receive emails fast and do my research, I’m fine with 2 mbps speed. The plan also comes with free telephone service. All businesses should think green and cut costs not just for the benefit of the business but also for saving our planet.

  8. Well a good rule of thumb is to be really careful whenever you use the “outsource” word – the “O” word – but in your case you are simply mentioning a general technique, so you should be safe. In general you are correct too, why waste your time when if you can get someone else to do the work then go that route. Now it carries with it all those connotations though about shipping jobs overseas, so play it safe. Going paperless is also a big one, and I used to work at a State job and it was crazy the amount of paperwork that they had to digitize. Thanks for sharing.

  9. Outsourcing has helped us to reduce our costs and workload. But for those businesses that are just starting out, outsourcing may not yet be feasible for them because of the costs. Though cheaper, it still incurs costs. Nevertheless, outsourcing is still highly recommended especially if one’s business has already gained a stable footing.
    Sammy Blackmore recently posted…Your Employee Mindset Is Stopping Your Business Growth – More Time More Profit: Helping Entrepreneurs and Business Owners Scale their BusinessMy Profile

    • For business just starting out outsourcing is completely out of the radar. In those cases the only way of cutting costs is to have as few people as possible making as much work as they can. That usually means that the founder (or co-founders) is going to work long hours in order to meet the desired goal.

  10. Going paperless makes much sense. It not only reduces expenses in the office but it also increases productivity. It’s much easier and faster to search a digital archive than to do the same on a paper one. Imagine a room full with documents and having to find the right one you are looking for.

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