Since small companies are generally start-ups or haven’t become well established yet, they need to take each and every step with more caution. Since they are in their initial stages, they neither have lots of resources nor endless amounts money.
So it’s important for them to try to complete each and everything within a specific budget. Here are few of the tips small businesses can take in to account to cut their company’s costs.
- Make Use of Technology
Business Technology may cost you at its initial stage but the return that you will get after that would be out of your thoughts. It increases your productivity and reduces the chances of error.
Along with this, you can advance your business and can even reduce staffing costs by saving money by employing technology instead of humans (wherever required).
This technology can come in a number of forms such as marketing and sales automation, Lead Forensics alternatives, email marketing or online chat services.
- Cut Supply Costs
You can ask your vendor for some discounts if you’re a regular customer. If they don’t cooperate with you here you can search for new suppliers. If they are providing you the same quantity at lesser amount you can definitely make a move.
However, chances are they would surely offer you that discount. This could be a great cost saving for your company.
Few professionals are ashamed of asking for discounts but believe me you don’t need to be. Always remember that you’re company too offers the discount wherever and whenever required. So you don’t need to be embarrassed for the same.
Another way to get discount is by paying your bills routinely. There are some wholesalers who give importance to such customers and you can be one of them.
- Cut Advertising Costs
Advertising plays an important role in making people aware of your brand. But it’s not necessary that you put too much of your money into it.
Some people advertise unnecessarily each and every where they can. However, you should ask yourself once if it’s really required. Advertise yourself where feel you can get the target audience.
Suppose if you’re B2B marketers and you’re advertising on television, it doesn’t make much sense. Instead, you should advertise on internet, through emails, websites etc. and it won’t even demand money. If it demands, it’s not that much.
You can also do so by cold calling, cold emailing, distributing your business cards. These are inexpensive ways of advertising.
- Step into Bartering
Do you remember the old times? Earlier, people used to exchange goods for goods, animals for animals and so on. This system of exchanging objects with objects or good and services in return for goods and services is known as Bartering.
In this system, people don’t pay in exchange for anything. For instance- You’re a sugar supplier and I own a bakery shop. We can make a deal of exchanging sugar in return for cakes.
This way one can save a lot of company’s costs through implementing bartering system. The only thing you need to ensure is that you reached a good and successful bartering arrangement.
- Reduce the Use of Paper
It may be hard for many to digest this and some of you might be thinking oh come on how much one can save from this it just costs a little. But if you dig into deep you’ll find that one can really save a lot from it.
When you go paperless, you get to save on the cost of paper, ink, mailing supplies, postage, staples, paper punching machines, and more. Initially, it sounds that the cost is little but if you look it on a large business scale you’ll get to see that it costs a huge to the company. Use it where required.
Instead of offering invoices and pay slips on paper try to email it or provide a soft copy of the same.
- Employ Bulk Buying Only When Required
However, bulk buying is a good option because you get things at reduced cost or with certain discounts on products or services but buying things unnecessarily in bulk isn’t a good option.
Suppose your office goes through a consumption of 1000 notepads each year but if you’re buying 5000 notepads just because you’re getting a discount doesn’t make any sense at all because you’re affecting your company’s business budget. Whereas, you should aim to cut the company’s cost. Also, there’s a possibility that in the upcoming year there would be the reduction in the use of paper and notepads. Then, what would you do? Think about it.
- Power Down Nonessential Lights, Appliances, And Machines And Replace Existing Bulbs With CFLs
One can reduce the company’s electricity cost by switching off all the systems or power downing all the power appliances before you leave the office. If you don’t know then let me tell you, even if you power off whole the systems and electrical appliances just for 5 minutes, it makes a major difference to the company’s electricity cost. So, make sure you don’t forget to switch the power down before you head out of the office.
Also, if you’re using bulbs with high power or high watts then replace it with CFLs or less power consuming devices. Low power consumption means reduced electricity bill.
- Reduce Credit Card Debt, Use It Advantageously
On one hand, credit card seems to reduce your immediate business costs and it actually does the same. They offer reward points for discounts on future uses or cash back. They offer special rewards for purposes like shipping, travel, office supplies, and business technology. But wait, nothing comes for free.
It surely does help businesses to reduce cost but at other hands it has some of its own terms and conditions which says the company has to pay some interests rate and possible fees.
Also, interest charges are very high. If the payment has been made within the grace period there won’t be any charges but if due to certain circumstances you failed to pay the charges within the grace period interest would be charged on the $1,000 from the date of purchase until the payment is received.
So make sure you make payments before or within the grace period, if you really want to get benefited from it. However, it’s not a long-term cost saving.
- Prepare And Stick To A Business Budget
Before you proceed with any activity, any purchase or any deal make sure you have a business budget for your company. If you don’t have one, then create one.
If you already have one, stick to it and try not to exceed it at any cost, until you really can’t make without that particular thing.
The business budget gives an idea about the financial information of the company, expected sales and revenues, profits and more.
One can create an initial budget using a business budget template to calculate revenues, profits, and expenses. For a more detailed plan, you can purchase a business budget software.
To create a better business budget plan, click here.
- Hiring Interns For Auxiliary Operations
We, very well, know that either intern isn’t paid or if paid their wages are found to be less than the standard industrial wages.
Since internships are mainly made for students or starters their first most priority includes gaining as much knowledge and work experience as possible rather than bothering about the money they are being paid.
This creates a win-win solution for small businesses because the company is saving its costs through the lower wages.
Additionally, the company can get their most monotonous tasks done through their interns hence providing their valuable and core staffs to focus on some more important tasks. This way company can improve its overall efficiency as well as its productivity.