6 Easy Ways to Cut Your Business Expenses

6 Easy Ways to Cut Your Business Expenses

When it comes to making a profitable business, it all comes down to earning more than you’re spending. Well, while this may sound simple on paper, in practice, it’s all but. Cutting costs may seem like an efficient solution to reduce your overhead, however, most of the time, cutting costs and reducing the quality/capacity of your company go hand in hand. By reducing the quality/quantity of materials that go into your products, you’re actually making the product inferior, and by downsizing your staff, you’re also reducing your workplace capacity. In order to avoid this and still save money, here are six easy and safe ways for you to cut your business expenses.

6 Easy Ways To Cut Your Business Expenses
6 Easy Ways To Cut Your Business Expenses

Multi-skilled employees

The biggest mistake that the majority of entrepreneurs make is trying to be too self-reliant. What this results in is a scenario where the company would fall apart without their presence. Now, one trait of employers who do this is that they only hire people for entry-level positions and keep doing all the administrative tasks on their own. This makes them lower their criteria and hire people for a single, simple task. However, what if you were not afraid to delegate or hire people with multiple skills? This way, you could optimize your staff composition and your payroll, while improving the performance of your business.

 Automate your payments

One of the major money-wasters in your enterprise is various payment fees. Now, the majority of this you can circumnavigate by finding the right tool for the job. First of all, by paying bills online, you’re spending, on average, $0.5 per bill, which is a massive saving when compared to $12,00 that you would pay (again, on average) if you went to a bank. By getting a specialized card, you can acquire points or get direct cashback deductions. For instance, if you travel a lot (for work), you can apply for a petrol credit card, thus solving this problem. Other than this, it’s not just the direct saving but also the facility with which you handle this task that is important.

Improving your delivery system

The simplest way to improve your delivery system is to invest in fleet management software. How does this save your money? First of all, it gives you optimal routes, which allows you to avoid traffic jams (thus saving time) and allows you to spend the least amount of gas possible in order to reach your destination. With such a sophisticated tracking tool, you can also notice any dangerous on-road behavior by your drivers, which can save you a small fortune when it comes to avoiding traffic fees and penalties. Finally, it can help you figure out if some of your drivers are using company vehicles (and gas) to handle personal issues or if some of them are directly stealing from you.

Hire remote workers

In a scenario where you have to complement your workforce, you might want to start hiring remote workers. The reasons behind this are numerous. First of all, you get to save money on office space. If people work from home, there’s also no need to pay for their commute or to provide them with suitable equipment. Provided that this is the type of work that requires a laptop, all you would (probably) have to provide them with is an account on specialized software, that you’re probably already paying for, anyhow. All in all, this is a frugal practice that more and more agencies are using every day.

Outsource

The next issue worth addressing is the importance of outsourcing some of the functions of your enterprise. Sure, you can just start your own department but when you try to compare the effectiveness of such a team, the truth is that it’s far more expensive than simply outsourcing. Think about all the specialized equipment that your team will need. Then, consider for a moment the cost of all the courses and coaching that will prepare them for all that the industry brings. Not to mention the idea of hiring industry veterans (which is even more expensive). In the end, just waiting for them to become experienced enough, on their own, can be hard to bear. Remember, time is a finite resource and you never have a surplus of it.

Rent instead of buying equipment

Finally, you might want to consider leasing the equipment that your team uses instead of outright buying it. This reduces your up-front costs and provides you with a chance to innovate with a lot lower overhead. After all, when you buy an expensive piece of equipment, you’re agreeing to the fact that depreciation will consume the bulk of its value in several years. Then, when the new model is out and you decide to replace these appliances/machines, you’ll find that the resale value of your asset doesn’t cover nearly as much as you have hoped for. This alone is a strong reason to lease instead of buying.

Conclusion

The best thing about the above-listed six methods is that they save you money, without forcing you to compromise your business model. In other words, while they provide you with an immediate boost, they are not likely to come back to haunt you further down the line. A win-win scenario, regardless of your standpoint.