New small business owners face a lot of financial pressure, especially in the first few years of operation.
Savvy entrepreneurs look for ways to reduce costs while not skimping on important expenses that help build awareness, attract customers, and boost revenue.
Reducing operating costs can seem daunting, with regular expenses unrelentingly staring owners in the face. Yet solutions exist that will not hurt the business. Here are nine smart ways to reduce overhead for your small business.
1. Get Rid of Paper
Paperlessness is an ideal way to reduce expenses and clutter in the office or storefront. You will save considerably on printer and ink costs, photocopying expenses, and space needs. Instead of killing trees, you can store documents on inexpensive cloud platforms or hard disks. You will also be protecting the environment, which you can market to potential customers. This all makes going paperless a win-win scenario.
2. Invest in Technology
In addition to using technology for storage, there are powerful and inexpensive digital tools that can cut overhead. Here are a few examples:
- Use voice over internet (VOIP) services instead of a landline to reduce phone costs.
- Invest in video conferencing to meet virtually with clients and potential customers to reduce travel expenses such as airfare, hotels, rental cars, and meals.
- Leverage cloud technologies to lower the demand for in-house IT staff, storage space, and software upgrades.
- Offer telecommuting to lower staffing space costs.
- Buy refurbished phones, laptops, desktops, and tablets. Many come with as-new warranties and can lower your technology investment costs dramatically.
3. Shop Around for Utility Deals
One of the biggest overhead costs are those pesky monthly utility bills. Shop around for internet, phone, cable television, electricity, and oil and gas providers. Many of these utilities do not require locked-in rates and long contracts, although sometimes these are a good deal in the long term. Look to bundle services where possible and for promotional deals.
4. Choose Providers Wisely
Most small businesses rely on a team of professionals that help them with essential needs. When it comes to providing legal advice, bookkeeping services, and insurance coverage, it is smart to shop around. Insurance policy premiums can vary widely from carrier to carrier, so be sure to compare, or have a local agent who knows the key players and your needs.
One option is to upgrade from a bookkeeper to an accountant, who can look over your financials and tax situation, suggest changes, and offer financial strategies to further reduce costs.
5. Think About What You Need
Look around the office. Do you need all the furniture, supplies, equipment, and space? Sometimes there are assumptions that are made before the business opens that need to be reexamined. Having flexibility allows you to scale back or reinvest those resources in greater areas of need.
Space needs are a key area of savings, as leases and rents often eat up a large part of operating budgets. If you are paying for premium downtown business space in a heavily trafficked shopping area, and you run a consulting firm that does not rely on foot traffic, you are probably throwing money out the window each month.
6. Go Viral with Branding
Brand ambassadors are a growing area of viral marketing. Ask your loyal and satisfied customers to post on your Facebook page, send a tweet, or leave a review on Yelp or another review site. Word-of-mouth advertising is inexpensive but can make an incredible impact.
7. Practice Energy Conservation
You and your team should get into some good habits that reduce energy costs. This means turning off lights when leaving an office or meeting room, lowering air conditioning or heating use during the appropriate seasons, investing in insulation for rooms and windows, and switching the types of light bulbs used. While each of these changes is small, they add up.
8. Use Your Network
Friends, family, and former colleagues may be in businesses that would benefit yours. Do not be shy about approaching those you know and finding opportunities for reduced costs or partnerships.
9. Be Smart about Hiring
Sometimes, you can use a freelance employee, outsourcing agency, temporary help, or interns to complete work without hiring another full-time employee.
At Benetrends, we help small business owners with sound solutions. Whether it is funding small business, retirement plan management, or credit card processing, Benetrends can help you save money and reduce stress. Use our handy business planning calculator to see where you may be able to cut costs.