By Craig Evans
When it comes to running a business, you may uncover a lot of hidden costs that can hinder your success and profit margins. Luckily, there are things you can do to reduce your spending and be more financially savvy.
For 10 tips on how to cut your business operational costs while still witnessing amazing returns, keep reading.
1. Bulk buy office supplies
Every business needs office supplies, which is why suppliers will up their cost. To cut down on operational costs strike deals and discounts with wholesalers and buy supplies in bulk. This way, while the initial investment may be greater, you are saving money in the long run.
You should also recycle old pieces of paper where you can, as this will save you a lot of money and is great for the environment. Of course, recycling old pieces of paper won’t suffice for official documents, but you should encourage your employees to be sparing where they can.
2. Hire the right employees
When you have a team of capable employees that are passionate about furthering the success of your business, you will increase productivity and reduce operational costs. This is because they will be able to take on more responsibility and share any additional workload, instead of you having to create another role and pay another salary. This will also help to boost morale in the office, as you will have more money to award the employees that deserve a pay rise.
To find the right employees in the first place, you may choose to harness modern-day recruitment technology such as cloud based recruitment softwares. Through advanced intelligence, this software can help your business find and hire top talent in your industry so that your business can flourish.
Another way to reduce operational costs is to outsource elements of your business to external agencies. Outsourcing is becoming more and more common for businesses, and SMEs, in particular, are adopting it as a smart business management practice that is low-cost but offers huge benefits.
You can outsource whatever business processes you don’t have the manpower or expertise to complete in-house: HR, payroll, marketing, etc. Similarly, you can also hire freelancers to assist on certain projects as and when you require them. By doing this, you get access to the best expertise at a lower overall expense.
4. Use digital marketing
Traditional marketing may be draining your resources; you may be spending thousands of dollars of billboards or TV ads and not seeing the returns. This is because the majority of business and consumerism is now digital and operates online, and you can actually reach a larger audience more effectively using digital marketing.
While it’s still good to leverage traditional ads and printed marketing materials, you should focus more of your efforts towards low-cost or free alternatives, including paid ads and social media marketing. Social media marketing, especially, can offer huge returns at very little cost, and dramatically enhance your brand awareness. There is really nothing to lose.
5. Improve productivity
The more productive you are, the more money your business makes. So, introduce smart programs and tools that will assist in the overall operations of your business. Software that will increase your productivity includes G Suite and Dropbox, and organisational and task-based tools that will benefit your team include Trello and DoneDone.
6. Use Skype
Skype is an amazing tool used by businesses worldwide. The instant messenger and video platform can connect people overseas in a matter of seconds. So, instead of spending money on travelling or flying people out to meet with you, hold meetings over Skype. Conference calls on Skype are easy and efficient, and don’t cost a dime!
If you’re serious about reducing your operational costs, you should rely less on marketing and put more effort into networking and word of mouth. This is especially effective if you are a small local business, as spreading your message through your community and offering deals can help to generate leads.
When networking, it’s important to have business cards made. This way, you can end every exchange you have with a lead by handing over your contact information. Other printed materials that will help to enhance brand awareness include brochures and flyers, and promotional items like pens and mugs – hand them out where you can and watch as your message spreads through your community.
8. Share your workspace
If your business has an entire office space to itself, a lot of your money will be spent on rent, bills and office maintenance. This can prove disastrous when you have a big issue such as a plumbing problem to attend to because the cost of repair is your responsibility.
However, if you share a co-working space with another business (or businesses), you can share rent, bills, maintenance costs and even food. This will drastically decrease your monthly expenses and leaves you more money and time to spend on enhancing your business growth.
9. Hire interns
Consider hiring interns to assist with small administration-based tasks that will alleviate a lot of your time and workload. The advantages of hiring interns include not having to pay them (apart from maybe travel and food expenses) but you are offering them valuable work experience.
This could be a great alternative to outsourcing some of your simpler tasks to a white labeling company.
10. Quality not quantity
Another way to ensure you don’t overspend when it comes to business operations is to not take on too much. Especially if you are a small business or are in your first 5 years of business, the temptation to do too much can be detrimental to your success.
Streamline your business model, intentions and goals, and don’t spread yourself too thin. Once you have proven you can deliver one thing to an exceptional quality, then you can look into expanding your services/products.
By following these 10 tips, you can drastically cut your business’ operational costs. In turn, you will experience higher profit margins and greater reward, which will increase the longevity of your business model and present great opportunities in the future.
If you can be financially savvy, patient and not too overzealous at the beginning, you will accomplish great things.
My name is Craig Evans. I am a finance fanatic and tech junkie based in Sydney, Australia. I like to impart my knowledge and share insights on the latest business industry news, marketing and leadership tips. @__CraigEvans