6 Unexpected Cost-Cutting Strategies for Small Businesses
Being a small business owner isn’t always easy. The business will always have up and down periods. Sometimes customers line up, and the company may not be able to keep up with the demand, but other times it may be very quiet. During these low times, you may not have enough income to keep your company as supported as you may like. At such times, cut back on your spending rather than take out more loans. You need to be thrifty to keep your venture afloat. These are six unexpected cost-cutting strategies small businesses will benefit from.
Why do tedious tasks yourself when you can have a machine do them for pennies? Automation is the future of business. It can be very annoying to do repetitive, mundane tasks manually. Plus, someone could make an error which could cost your company even more money. To prevent this, you should invest in automation. Small businesses need to focus on the bigger picture items to grow and be successful. By implementing automation into your company, tasks like sending out reminders, getting notifications, sorting through invoices, etc., could be done in seconds. Employing automation is much cheaper than having employees do this work. Many companies, like Simply Flows, offer a free trial version of their product and then reasonable plans to choose from. Using automation will help your small business not have to worry about tedious tasks and save you money in the process.
2. Hire Freelancers
Instead of hiring full-time employees or expensive consultants, hire freelancers for your standalone or independent projects. The reason why freelancers will save you money is because they have no overhead fees. All you have to pay them is their designated fee for the work they perform. No health insurance, retirement, or time-off expenses to worry about. Instead, only pay them for the work they have completed. Obviously, a contract should be drawn between your company and the freelancer defining your expectations, but this is a significant cost-cutting strategy, given that labor costs are usually the biggest expenses for a business. Using freelancers is a great way to help your organization save money.
Having ample office space for a small number of people and the occasional meeting with a customer is not efficient. It is not smart to pay rent, utilities, insurance, etc. if you do not properly utilize the amount of space you have. Downsizing could be your unexpected cost-cutting strategy. Plus, you can arrange people in this smaller office to sit where it would promote the most efficient results. For example, if someone is constantly going to the filing cabinet to get excess paper or other products, it would be beneficial to place them by the filing cabinet rather than the printer. This strategic placement in a right-sized office would save money and promote productivity.
Also, consider running a fully virtual company, i.e., not having an office at all. Then, you would not have to pay for rent, furniture, or property insurance. Even before the pandemic, many companies were starting as virtual. That way, they could hire people from anywhere without being restrained to a physical location. People, on the other hand, would have the benefit of working from their homes, shared spaces, or the beach, if they wanted to, without being forced into crazy commutes and unpleasant cubicles. Both right-sizing and going virtual are viable options to save you money.
4. Cutting Operating Expenses
Operating expenses can go through the roof if not appropriately managed. Bills can begin to pile up, and small businesses may have no way to pay them if they do not have the income. It is essential to do whatever possible to cut back on these expenses. For example, electricity costs a lot in the industry. If you forget to turn off machines or lights, this could result in higher fees for your organization. Possible ways to cut these operating costs would be investing in solar energy or more cost-efficient lighting.
Additionally, consider reviewing and renegotiating the professional services you pay for. A small business may work with a few agencies for their bookkeeping, accounting, marketing, hiring, etc., and each may be willing to lower their fees if you renegotiate them. If this did not work, you could transfer to another agency with lower fares.
5. Do Your Own Advertising
Another unexpected cost-cutting strategy is that small businesses can do their own advertising. Rather than hiring someone that charges a lot to create digital advertisement materials, you can do this yourself. There are various free applications to get the job done. For example, companies can use Canva to create all sorts of materials for posts and ads – images, infographics, banners, postcards, etc. If a small business does not know where to place its ads, it can utilize programmatic advertising. Programmatic advertising is the placement of ads on websites and social media through AI. This is much cheaper than hiring someone to do this process for you. To cut costs, small businesses could make their own ads and do the ad placement themselves or through programmatic advertising.
6. Buy a Smart Thermostat
Would you be able to do work in a place that was overly hot or cold? I doubt it. Being in a comfortable setting contributes significantly to employee productivity and job satisfaction. Investing in a smart thermostat will surely pay back. These thermostats learn the company’s climate preferences and automatically adjust to create a comfortable temperature. Over time, this investment would cut back on heating and cooling costs. People would no longer have to constantly adjust (or argue over) the temperature settings in the office. Plus, a comfortable workplace contributes to workers being more relaxed and productive.
Small businesses need to cut costs to remain afloat, especially during low points for their organization. Saving money will help with the financials. Furthermore, these strategies can lead to more efficient and productive workplace. Also, being efficient means more time and attention towards customers and your products. Strategizing and determining the best ways to save money is vital to small businesses. These unexpected cost-cutting strategies will help your organization not only thrive but be more successful than the competitors.