If you’ve ever played financial tug-of-war with your business finances—pulling on one side to cut expenses without sacrificing quality—you know how tough it can be. But with some clever thinking, you can get your feet on solid middle ground.
From tech tweaks to vendor relationship hacks, we’ll guide you through eight creative ways to trim expenses without compromising on what makes your business stand out.
1. Leverage technology.
The cost of investing in new technology might make you hesitate, but choosing the right tech for your small business can lead to savings. By automating routine tasks and improving efficiency, your tech investments can help you cut costs and get more done.
- AI-powered tools. With nearly 25% of small business owners already using artificial intelligence (AI) in their businesses, AI isn’t just for corporate giants. Small investments in AI, such as an AI chatbot that handles common customer inquiries 24/7, can free up your time to focus on what matters most.
- Cloud-based services. Cloud-based services let you store and access your data online instead of on your business’s hardware. By moving your work to the cloud with services like Google Workspace, you can access scalable storage and collaboration tools, all while paying only for what you use.
- Digital payment solutions. Digital payment platforms such as Square or Stripe cut down on tasks like tracking payments and issuing invoices, often with lower transaction fees and faster processing times. Plus, they’re ideal if you ever take your business on the road, allowing you to handle transactions wherever you are.
2. Outsource non-core tasks.
Running a small business means wearing many hats—but there are some hats you don’t need to wear. Outsourcing non-core tasks lets you tap into a wealth of knowledge without the overhead of hiring full-time staff. Here are some tasks commonly outsourced by small businesses:
- Bookkeeping and accounting. Take number-crunching off your plate, and ensure numbers are accurately recorded and filed on a timely basis. Add in the valuable insights an accountant can provide, plus the time you save tackling the spreadsheets yourself, and you’ve got a recipe for financial clarity and savings.
- IT and cybersecurity support. Third-party IT and cybersecurity experts resolve technical issues, keep your data secure and maintain your system performance—usually for less than the cost of hiring full-time IT staff. In fact, cybersecurity is one of the top outsourcing priorities for businesses—a sensible choice given the legal and financial havoc a cyberattack can create.
- HR administration. If you have employees, you know that navigating payroll, employee benefits and labor laws can be a challenge. By letting experts handle these HR tasks, you avoid the cost of an in-house HR team while also reducing the risk of costly compliance mistakes.
3. Supplement staff with freelancers.
Outsourcing typically involves delegating entire operational functions. Supplementing your staff with freelancers, on the other hand, lets you bring in talent on an as-needed basis. Here’s how this can benefit your business:
- Project-based flexibility. Whether it’s handling seasonal peaks, special projects, or one-off tasks, you can scale your workforce up or down as needed.
- Cost-effective expertise. Hiring freelancers lets you get work done without the overhead of full-time staff—a cost-effective approach for short-term needs.
- Quick turnaround. Because freelancers are accustomed to working on a project basis, they can usually accommodate tighter deadlines.
- Large talent pool. Freelancers work remotely from anywhere in the world, giving you access to a global talent pool.
- Minimal training. You’ll generally hire freelancers with the specialized skills you need, which means they can start right away with minimal training.
4. Optimize vendor relationships.
Building strong relationships with your suppliers can lead to better contracts, bulk purchase discounts and improved service. Make the most of your vendor relationships with these strategies:
- Negotiate better terms. Whether it’s payment terms, discounts, or delivery schedules, even a small change can translate to savings in the long term.
- Consolidate your purchases. Consolidate your purchases to a few key vendors to take advantage of any bulk purchase discounts.
- Maintain open communication. Regular communication ensures your vendors understand your business needs.
- Stay organized. Use vendor management software to track and monitor your contracts and make data-driven vendor decisions.
- Evaluate regularly. Assess vendor performance regularly so you can catch problems as they’re emerging, before they become costly concerns.
5. Improve energy efficiency.
Going green isn’t just good for the environment—it’s great for your bottom line, too. When it comes to energy efficiency, small changes can add up quickly. Here’s how to get started:
- LED lighting. Light your way with energy-efficient LEDs—and reduce your electricity usage.
- Programmable thermostats. Control the temperature based on your schedule, so you’re not heating or cooling your workplace when no one is there.
- Energy-efficient appliances. ENERGY STAR-rated appliances are more efficient, which means lower utility bills. An added bonus? You might get a rebate.
- Motion sensors. Lighting up less frequently used areas? Motion sensors will ensure your lights only turn on when needed.
- Phantom power usage. Computers and other equipment are energy vampires (they still use power even when idle). Turning them off when not in use will reduce phantom power usage.
6. Improve employee retention.
High turnover isn’t just disruptive, it’s also costly for businesses. Competitive salaries are key, but other ways to build a loyal and committed team include:
- Feedback and communication. Conduct performance reviews, hold one-on-one meetings, and encourage employees to share their ideas and concerns. You’ll build a culture of trust and transparency in which your employees know how they’re doing, where they can improve, and that you genuinely care about their input and well-being.
- Positive work environment. While 72% of employees feel positive about hybrid work and returning to the office, many are also looking for more collaboration opportunities and a sense of belonging. Create a positive work environment by offering spaces that support collaboration, encouraging work-life balance and building community with social events.
- Employee recognition program. A bit of appreciation might not seem like much—especially when compared to tangibles like salaries and benefits. But according to a joint study by Gallup and Workhuman, recognizing employees for their hard work can go a long way when it comes to creating a community of engaged employees who feel valued and motivated.
7. Audit your subscription services.
It’s easy to overlook subscription costs, but these small monthly expenses can sneakily take a large chunk out of your budget. Here’s how to eliminate unnecessary subscriptions and ensure you’re only paying for what you truly need:
- Review your subscriptions. Include all services requiring recurring payments, from software to online tools to memberships.
- Identify overlapping services. Consolidate any subscriptions that provide similar features so you’re not paying twice for the same thing.
- Assess your usage. Evaluate how often you’re using each service. Downgrade or cancel any subscription you’re not using to its full potential.
- Research alternatives. Don’t hesitate to switch to a service that offers better value or more features for a lower cost.
- Negotiate better rates. If you’re a long-time customer, reach out to the subscription provider about discounts as a reward for your loyalty.
- Track renewal dates. Set up a reminder system to review subscriptions before their renewal so you’re not paying for services you no longer need.
8. Get creative with your marketing.
By thinking outside the box, you can promote your business effectively while keeping your marketing budget in check. These creative approaches can boost your brand without breaking the bank:
- Social media influencers. Team up with an influencer who has a small but dedicated number of followers that align with your target market. Collaborate on authentic content that highlights your products and services. This can build awareness of your brand without a hefty price tag.
- Local search results. It can be tough for small businesses to leverage search engine optimization techniques to come out at the top of search results. Luckily, local search results (think “Mexican restaurant near me”) aren’t nearly as competitive. Optimize your website for local searches and make sure you have a Google Business Profile.
- User-generated content. User-generated content (UGC) includes customer-created reviews, photos, videos and social media posts. It’s authentic content that often resonates with potential customers. Leverage UGC by encouraging customers to share their experiences with your products or services on social media; ask them to post reviews on your Google Business Profile.
From embracing new tech to optimizing your vendor deals or shaking up your marketing game, every small step you take can help you save money. Stay creative, stay efficient and see how these changes can boost your bottom line.
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