6 Unexpected Ways to Cut Costs in a Small Business

Every business wants to increase their revenue and there are two ways to do this: either you grow your profits or reduce your expenses. As the world hurtles toward a global recession, increasing sales and profits is challenging if not impossible for many businesses. In which case, you are left with the other option: to cut your expenses.

In this post, we’ll outline 6 easy and effective ways to cut costs in a small business and cut unnecessary expenses. Let’s get started.

1. Save Money on Staffing

A good portion of your business revenue is spent on your staff. While you can’t run a business without dedicated employees, there are ways you can save money on staffing. For example, you can use online job portals to find freelancers and local employees that are willing to offer you the best service at a reasonable price. Freelancers and part-time remote employees can save significantly on overheads. You don’t necessarily need to hire full-time employees if you are on a tight budget.

2. Find the Best Deal on Insurance

You cannot avoid shelling out for insurance entirely: insurance is an important and necessary expense for every business.  While insurance is inevitable, the company your insurance provider is totally up to you and costs can vary significantly from company to company. Shopping around to find the most affordable insurance can result in significant savings. Don’t be afraid to negotiate for a better deal – many providers are open to offering discounts. After all, it doesn’t hurt to ask!

3. Reduce Transportation Expenses

Transportation cost is another significant expense for many businesses. If you run a business that involves regular transportation and vehicles, then you will have substantial fuel and maintenance costs. One way to cut down on transportation expenses is by limiting vehicles to necessary travel only.

Besides that, you don’t have to invest in a brand-new truck or car. A new four-wheeler can cost a bomb, so you can save significantly by looking for used cars on the online resale market. Alternatively, purchase a used vehicle from your relatives or friends for a fraction of the cost. You will find many used vehicles in tip-top condition that are almost as good as new ones, but at a fraction of the cost.

4. Find Cheaper Marketing Alternatives

Advertising and marketing no longer need to be expensive for small businesses. With a majority consumers shifting to the digital world, businesses have started to embrace digital marketing. This means that marketing your product and services online can be as simple as building your presence on social media building a professional-looking and reliable website. It will help give your audience a better understanding of your services, product prices, and other features.

Brand publicity on social media is absolutely free. You don’t have to pay a single penny to set up a profile on Instagram, Facebook, Pinterest, LinkedIn, Twitter, and other social networking sites. It is also possible to build and maintain a professional website for very little money if you are willing to invest your time and energy to create it yourself.

5. Digitize Your Business

Rent can cost your business a fortune with some companies spending half their business revenue on office space, electricity, and utility bills every month. It is worth trying to negotiate the lease terms with your landlord to try to get a discount on your office rent. However, you can eliminate most of these expenses by moving your business online. Not only will it cut down the rental expenses and utility bills, but companies operating from remote locations can save money on transportation costs.

These days, you can effectively run a business entirely online using modern technology. Whether you need to organize a meeting with your team, contact clients or arrange payroll, nearly every task can be performed digitally. You only need dedicated communication systems and a payment app to execute transactions online. Digitizing your business is a great way to cut unnecessary business expenses.

6. Use Discounts and Promo Offers

The discount isn’t only for individual consumers. Even wholesalers offer products at a discounted price on special occasions. If you regularly purchase wholesale supplies for your business, then you should hunt for the best deals around to save money on the supply costs. The amount you save on your wholesale supplies can make a big difference to your total business budget.

Not only discounts and promo deals, but a business owner must also look for cheaper alternatives. For example, if you are running a bakery shop and find a wholesaler selling the flour at a 30% cheaper rate than your regular supplier, then it is time to switch your supplier.

Small businesses need steady cash flow to keep their business running. Many small businesses face financial struggles because of poor financial decisions. In order to increase your profits, you need to cut down on your expenses, particularly during challenging times.