Businesses around the globe are looking for ways to cut expenses as they try to stem the tide in the pandemic’s wake. Now is the time for you to reduce expenses without hurting your brand, your reputation, or the services you provide to your clients. Thankfully, there are some strategies that you can implement to cut costs and still provide your customers with the level of service they demand.
Reduce Energy Costs
A great place to cut costs is by focusing on energy savings. If your business operates out of a brick and mortar facility, there may be state and federal incentives that can put money in your pocket if you install solar panels or if you use energy-efficient lighting.
Not only does taking this step reduce expenses, it also gives your business the ability to tell customers that you are a leader in environmental matters. The positive PR and goodwill that taking steps to reduce energy costs produces is invaluable.
Your business may be able to use power purchasing agreements or lease the space on your roof to solar providers. Besides lowering your energy use, you will earn money. State and federal programs could mean that installing solar panels is cheap or free.
When Possible, Buy in Bulk
There is a reason why stores like Costco are so popular. Shoppers understand that buying in bulk is less expensive than purchasing retail. The same principle can work for businesses too. Vendors may sell their product at a slightly reduced price if your business increases the quantity of said product it is purchasing. This allows you to maintain the same quality level and save money not only from the vendor but also on shipping.
Use Free Software
There was a time when if you wanted to purchase quality software, you were forced to buy it from the name brand vendors. Now, there is a lot of freeware on the market is as good, and sometimes better, than what the name brand vendors offer. Your business may reduce expenses by carefully and critically reviewing the software that you use and determining if it is possible to replace expensive subscriptions and costly annual upgrades with freeware. For example, there are several popular paid video conferencing services. However, you can find a free conference call service that likely has unlimited free conference calling and a lot of the same features that paid video conferencing services offer.
Cut the Dead Weight
Do you have clients who pay late or who are constantly requesting discounts? If so, now might be the time to cut them loose or no longer extend them credit. Extending credit to clients is expensive. And you are under no obligation to do it.
Before you cut a client off, evaluate whether you can live without that client. If you cut off a client, they will likely shop around. Another option could be to charge late fees or interest to clients who have past-due accounts. This might offset some losses you are taking and reduce business expenses.
Outsource Tasks When Possible
Your company could spend more time and resources handling paperwork as opposed to growing your core business. Entrepreneurs especially fall into the dreadful habit of wanting to do everything themselves. They feel that doing everything in-house can ensure quality. Really, what they are doing is wasting time that could be used on performing tasks that add value to their business.
Outsourcing is a superb way to reduce business expenses without damaging the product or service you offer. Outsourcing things like payroll, bookkeeping, and accounting can free up time and resources that can be spent elsewhere.
If you are worried about business expenses, the worst thing that you can do is pretend that the issue does not exist or that it will just go away. It will not. You need to move fast and remember that time is money. Start by setting cost-cutting goals and put a time limit on them.
Your focus should be on what you can do right now. Don’t spend too much time thinking about what you might want to do. Incremental changes will be less disruptive and allow you to reduce costs in a way that does not hurt your brand.