Consider implementing these practices to increase your bottom line without sacrificing your business’ needs.
If you own a small business, you’ve probably spent the last couple of months doing financial gymnastics to come up with new ways to make money with stay-at-home orders in place. But saving money is equally as important if you want to stay in business. Here are 11 innovative ideas for cutting costs to increase your bottom line.
1. Downsize your office space and invest in remote work
Everyone who can work remotely is doing so right now. But what will happen when the stay-at-home orders are lifted and people are allowed to go back to the office? One thing we might learn from this experience is that office space might not be all that necessary.
One thing we might learn from this experience is that office space might not be all that necessary.
Take a good look at the work your team is doing from home. Can they continue to work that way indefinitely? Perhaps some of your work tasks are better suited for the office, but others can be done from home. You can rent a smaller office space for less money, and let your team work remotely as much as possible.
2. Skip the culture — decrease knick knacks, snacks, supplies
Office culture is changing. No longer do we need a fancy office with catered lunches and break room snacks. Instead of spending thousands of dollars on an interior decorator, offer your staff a small office supply stipend if they’ll work remotely. For work that must be done in the office, be sure to save paper by printing double-sided by default and reusing waste paper for note-taking.
3. Pay rents up front for bulk discount
Most landlords offer this option. Take advantage if you can.
4. Negotiate new rent terms
The corporate rental market has been rising for years, though that might change due to the pandemic. In any case, you can save money on your rent by negotiating a lower rate on a longer-term lease. If your lease is coming to an end soon, you might also consider settling for Class B or C office space. This can cut your rent costs by anywhere from 10 to 50% compared to Class A space.
5. Save energy
There are a number of ways to save money on your energy bill without sacrificing comfort for your employees and customers. First, you should consider installing a smart or programmable thermostat. These devices can learn when there are people in the office, and when there aren’t, so that you are not wasting energy heating or cooling the space when no one is there.
You might also consider some passive energy saving measures, such as solar panels, double pane windows, and tightening seals on windows and doors. And, of course, you should turn off lights and power down machines when they are not in use.
6. Review all of your monthly and annual payments
You may find some services you can cut back on or eliminate without hurting your business.
Your company probably pays for a lot of essential services via monthly or annual plans. Many businesses use cellular service, cloud computing, bookkeeping, and payroll services. At least once per year, review your plans to see if the level of service you pay for matches your usage. You may find some services you can cut back on or eliminate without hurting your business.
7. Ask employees to clean their own spaces
If you are paying for a daily cleaning service, you might be able to cut back on that expense. Ask employees to clean up after themselves, and have the cleaning crew come by just once or twice a week.
8. Use freelancers
The gig economy is booming, and it’s not hard to see why. Many people enjoy freelance work because it gives them the freedom to pick and choose their own projects and set their own hours. Freelancers are easier and cheaper to hire, too. You don’t have to provide health insurance, retirement, or PTO benefits. Just pay them their fee.
You might still need a core team of full-time employees to do the day-to-day work of operating your business. But for non-core activities, freelancers can be an excellent source of skilled labor without the overhead costs. Just be sure you have a well-written, enforceable contract in place.
9. Invest in your employees
While we’re looking for ways to save money, it’s important to note that there are some things worth spending a little more on. Chief among them is employee retention. As we’ve noted many times in the past, it costs a lot of money to replace an employee. So when you’re thinking about budget items to cut, stay away from your salary and benefits packages. In fact, it’s a good idea to give those a boost at least once a year. Even if you have to pay your employees a bit more, it will save you money in hiring, training, and onboarding costs, making it well worth it.
While we’re looking for ways to save money, it’s important to note that there are some things worth spending a little more on. Chief among them is employee retention.
10. Offload old or outdated technology
Take a look around your business. You probably have at least a few pieces of technology that are what we call “legacies.” You use them because your industry has always used them, even if there is a cheaper, more efficient alternative. This is especially true if your business has been around for a few decades. It is expensive and time consuming to change over to a new technology, especially if the old machine is a central part of your business.
But there are probably at least a few things you can get rid of. For example, do you really still need a fax machine or a landline phone? Are you paying for software that you don’t use? Do a thorough review of your business technology, and cut out what you can.
11. Negotiate all software renewals for better rates
Unless you’ve signed a binding contract, every price is negotiable. Sometimes, simply mentioning that you own a business is enough to get a discount. But also ask about bulk and referral discounts. You might even ask other small businesses to create a cooperative in which you buy software together so that you can get an even better bulk rate.
Every business is different. We know that some of these ideas might not apply to you. But nearly every company has some potential cost savings that they haven’t found yet. We encourage you to take a good look at your budget, and see what you can cut without sacrificing business needs. What are you doing to cut your company’s expenses? We love hearing from our partners!