10 Ways to cut costs in a small business
High or fluctuating costs can pose a serious risk to a business. That’s true for any company, but it’s especially true for small businesses that rarely have large reserves or ready access to low-cost credit to fall back on.
Reducing costs and creating efficient processes can limit those risks and can help small businesses to improve their resilience and maximise their profitability. Cutting costs doesn’t have to be difficult either. Here we give you ten clear and simple examples of how to cut costs in a small business setting.
How to cut costs in a small business
Starting a small business can be rewarding and profitable, but you face a number of risks, including high and fluctuating operating costs. But you can minimise your costs and reduce your risk by doing the following:
1. Create a budget
Drawing up a budget for your business is the first step in reducing your expenses. A budget will help you track and understand your costs, including showing how those costs change over time. A business budget can help you impose financial discipline on your spending and can reveal where your greatest cost risks and opportunities for cost reduction are.
2. Use utility comparison sites
Utility costs like heating, water, electricity and even internet access can be significant expenses for small businesses. And they can vary by supplier too, often markedly. You can use utility comparison sites to instantly compare utility providers to find the best deals for your business.
3. Reduce energy consumption
Finding the best deal on energy will be thwarted if your business wastes it and uses more than it should. A handful of simple steps can help ensure you reduce your energy use and costs. Using LED lighting and energy efficient bulbs can reduce lighting costs. Switching off all energy points when not in use can reduce your bill too.
Rather than being a challenge for your business, operating more sustainably can reap a range of benefits, particularly when energy and material costs are on the rise globally.
4. Reduce and recycle waste
As well as being a socially responsible action, reducing and recycling more of your waste can directly reduce costs if you pay per waste collection or pay by the bag. By reducing waste and recycling, you’ll produce less bags of waste and can request less frequent collections. Find out more about how businesses are responsibly disposing of e-waste.
5. Go paperless
Workplaces can consume surprising amounts of paper. Switching to a paperless operation can bring considerable savings over the long term by eliminating a big, and often unnecessary, business expense. Find out more about going paperless.
6. Take advantage of new technology
New developments in technology, especially new software, can automate processes that were previously labour-intensive across a range of departments – from accounting and payroll to HR and marketing. Adopting these new technologies can allow staff to get more done in a shorter amount of time, helping to boost the productivity of your employees.
Virtual and collaboration technologies that support working at a distance can reduce travel expenditure too. Opting for hybrid working can also decrease business expenses by having less employees on site.
7. Find alternative office locations
Rent and the other expenses that come with operating from a physical location can be considerable operating costs. Moving to an alternative location with lower rent, plus downsizing by offering hybrid working, can offer substantial cost savings.
8. Buy refurbished equipment
Office equipment can be expensive. However, many businesses across the country refurbish used office fittings and IT equipment. Refurbished office equipment can be as good as new, or close to it, but can be bought for considerably discounted prices. It’s also a more sustainable option than purchasing new.
9. Implement a managed print service
If transitioning to a fully paperless office isn’t feasible, you can still reduce your print costs through implementing a managed print service, rather than purchasing printers and toners. Flexible contracts can be adjusted to meet your business’ exact needs.
10. Utilise digital marketing platforms
Traditional marketing media is expensive, but digital platforms can offer fantastic value for money. Blogs, social media and online advertising (there are great deals to be had) can drive significant traffic to your company’s website with minimal expenditure. You may already have employees who are already adept social media users who will be enthusiastic to help with digital marketing.
Helping your business work harder
Whatever the size of your business, and whatever the industry you operate in, our portfolio of business solutions can help you reduce costs and enhance your productivity. From print management and hybrid working to collaboration tools and reducing your operating costs, we can work with you to secure and develop your business.