Are you running a profitable business? Whether you are just starting your business or you're 20+ years in, cutting business expenses that you don’t need can go a long way in helping you become profitable.
When you only look at the biggest costs to your company, the task can seem overwhelming. But the places where you can really pinch pennies are often overlooked and undervalued. You know those things called subscriptions? Like $1.99 a month here, or $9.99 a month there. Or you start a “free trial” but have to enter your credit card, and because you are so busy, you forget to cancel it. And it’s not even worth canceling something that is $1.99 a month, right!? But let me tell ya, it all adds up, and FAST!
Many business owners I consult with do not look through their statements to ensure they need everything they are paying for monthly.
1. Go paperless.
This one is really a no-brainer, but so many companies are afraid of changing and their employees give major pushback. When trained correctly, this is one of the best changes our clients make. It doesn’t happen overnight but having a strategy to implement change helps you see the light at the end of the tunnel.
The amount of money you're spending on paper, printer ink and shipping could be reduced by going paperless. To help you cut these business expenses, consider sending emails, using project management apps such as Slack, Wunderlist or Base Camp to collaborate with your team. And some of them are FREE! That’s right! Get rid of your post-it notes.
Not only can it help declutter the lives of everyone involved, it's also more sustainable. Individuals who interact with your company will be impressed by your efforts to being the most productive as possible.
2. Move your business to the cloud.
If your company is spending a ton of cost on IT for data backup—switching to cloud computing could help you cut costs majorly and sleep a little better at night!
The financial investment—let alone the physical space—could cost a small fortune. There are a number of cloud services you could utilize, including Dropbox Business, Box.com, even Google Drive. By combining cloud-based services, you could eliminate the need for physical data storage devices. Plus if your office flooded or caught fire your business data is most safe in the cloud. So don’t rely on those external hard drives. Trust me; when one of my interns accidentally dropped a hard drive that was storing the only video footage from a client wedding, my heart sank to my stomach. It did corrupt the footage and it cost us thousands of dollars in the long run.
3. Rethink your real estate/office space.
A large office space can be an unnecessary business expense. There are some alternatives that can help you dramatically cut your overhead:
Go virtual. If your company operates in a way that doesn't require face-to-face contact, you could save a tremendous amount by having your team members work from home (BUT they have to be self motivated and disciplined-it’s not for everybody).
Shared space. Try finding spaces that already have tenants committed to long leases. There is a chance you could pick it up on the cheap if they have extra space.
Owning the building. If you can find other companies looking for office space, consider getting tenants to rent from you. This is an investment on your part.
4. Travel less and use meeting technology tools
With modern technology on the rise it does make it easier for us to be in two places at once. Instead of spending money on expensive plane tickets and hotel rooms, take advantage of resources like Zoom, Skype and FaceTime wherever possible. Just ask the client. You may be surprised. After doing this for an entire year and tracking our meetings, we did over half of our revenue over Zoom video calls. While you may not be able to give up traveling entirely, free web conferencing and video calls can save you time and money that could be reinvested into your business.
5. Work with contractors versus employees.
By exclusively hiring employees, you could be overlooking the advantages of contractors. In my experience, I have found that people actually care more and feel more invested in the company. There is an entire labor pool of talent filled with hardworking and talented individuals that freelance. Not only could this lower your company's labor costs, but it can provide you flexibility, especially during a seasonable business. Also consider reaching out to local colleges to recruit interns (but have a policy manual). Each state is different in requirements for interns. You can download our manual here if you need help getting started.
6. Ask your team for their thoughts on ways to cut business expenses.
One of the most overlooked methods of radically cutting costs, without compromising the business in any way, is to seek guidance from your team (they see blind spots-we all think differently). Try sitting down with them and informing them of your current cost-cutting methods. Be up front and honest. You will be surprised how quickly you can start saving money by communicating your goals.
7. Find opportunities for your business to get free advertising.
Well, nothing in life is “free”. Reframing, instead of “paid” advertising, consider the cost of your time and the ROI it can have. The most obvious, is social media. But not just regular social media accounts. Make sure you are using the business accounts so you can view the analytics. Oh, and you must have a strategy. And if you don’t know what to talk about or post about, simply ask. Ask the audience. They will tell you. Shockingly.
Facebook groups have gained a lot of traction recently. So consider joining groups relating to your industry on Facebook or LinkedIn. However, do be advised that posting content directly to these third party platforms, is giving the respective platform the permission to owning YOUR content. So, a way to get around that, is share from your website or a platform that you have ownership of. There are pros and cons to having your content live in certain areas, but at the end of the day, YOU will want to own and control your own content.
Feeling better about being profitable? Get creative to cut unnecessary business expenses. By thinking out of the box and implementing these strategies, you could save your company hundreds—or even thousands—annually.
Oh, and one last thing. You owe it to yourself to look over your expenses quarterly; really should be monthly and do NOT wait to do annually.