by Monika Rizovska
In an uncertain time and economy when every cent counts, even the smallest income in profit can impact the overall business profitability. The good news is that smaller steps and cuts usually bring a more significant effect. It is often uncomplicated, common-sense steps that improve the bottom line, especially for a small business.
This economic crisis influenced by the pandemic is an excellent time to step back and look carefully at your company practices.
What are you doing well? And what can your company improve?
- Cut supply costs
- Cut operation costs
- Lower your financial expenditures
- Digitize your marketing
- Use time management strategies
- Enhance new digital trends and technologies
- Narrow your focus
- Use your office space more efficiently
- Use your employees’ skills
- Use open-source software
- Keep quality over everything
1. Cut Supply Costs
Cut costs and save money on office supplies by contacting distributors to let them know you are price shopping. Never settle with the distributors you already have and keep checking for offers from other distributors outside your current ones. Usually, the newer and smaller distributors provide better value and service as they are in the beginning, and they will strive to be more flexible and thus help you cut costs. Plan wisely, buy supplies once in a month or in bulk. And remember that buying bigger supplies will help you save money and cut delivery costs.
2. Cut Operation Costs
As a startup or company owner, you need to look for ways to cut operational costs and optimize resources. Here are our few suggestions:
- Resell the old equipment or consider other ways to use your waste to create another product or donate these to people or other companies in need.
- Rent the free space to another startup, digital nomad, or freelancer. You can rent one room, an entire office, or storage space.
- Follow and measure the operational efficiency of your startup or business to see the reduction effects and optimize your available resources. Track your performance parameters and see how they reflect your efficiency goals and offer incentives when you meet those goals.
- Have energy-efficient appliances. Turn off lights and unplug unused tech.
- Encourage telecommunications and work from home days.
- Go paperless, save nature and the trees and also cut costs.
3. Lower Your Financial Expenditures
Check your insurance policies if you want to lower your financial expenditures. Also, check your financial accounts in order to find places where you can save money.
- Compare the competitive rates of all providers in order to save money on insurance. Then, ask your current insurance provider or lender to match the most competitive rate of all.
- Combine your insurance policies or bank accounts.
- Evaluate your insurance policies in order to ensure that you are not over-insured or that you do not have duplicate coverage.
- Do not accept any unnecessary debt. Conduct a thorough cost-benefit analysis and make a future forecasting when considering the option for business expansion. Take into consideration all the opportunity costs and the entire effect of debt payments on cash flow. A surplus of debt affects company rating, interest rates, and the ability to borrow in the future.
4. Digitize Your Marketing
The social media networks nowadays offer cheaper alternatives for reaching more specific and targeted leads and clients. Instead of spending on traditional TV commercials and billboards, with SEO and excellent content marketing, you can seize the search engines and generate traffic to your website and increase awareness about your startup or business.
Linkedin, Facebook, Youtube, Twitter, and website articles and blogs are critical in lead generation and finding new potential clients. Study your buyer personas, target market and discover what will be a better method for reaching your targeted demographic, which social media channels are better to use, and how you can achieve them in the most efficient cost-savvy way.
- Build a customer e-mailing list and a referral program. A client recommendation is far more likely to result in a sale than traditional marketing.
- Facilitate word of mouth marketing, use networking more, and advertise less. Clients are more likely to close a deal with a business or someone they recognize. Check the existing groups on Linkedin and Facebook. Make sure you provide valuable comments and recommendations to everyone in need, build up a community, and seize the contacts as future potential clients.
- Reduce marketing costs by having in-house marketers and do not hesitate to outsource when needed.
- Partner with other companies, organizations, and get sponsors for your networking events.
- Use social media instead of traditional marketing for better tracking and better results.
5. Use Time Management Strategies
Optimization of employee productivity cuts your costs of doing business. Time is also a cost and money.
- Limit access to time wasters and other distractions. Propose usage of platforms and applications that help your teammates and employees to focus and concentrate on staying on track with their tasks.
- See where your employees or teammates spend the most time and dedicate a reasonable time to complete specific actions and functions. Help your team and offer your support if you see that there are tasks which consume more time.
- Schedule each activity and encourage your employees to update their schedules daily and weekly.
- Schedule a meeting only when needed. Make it clear that you respect everyone’s time and ask everyone to be on time, each session to have a plan and everyone to follow up at the appointed time.
6. Enhance New Digital Trends and Technologies
Reduce company costs by being more digital whenever you can use free online tools.
- Set up an option for a virtual office.
- Online meetings help minimize travel costs, and virtual offices can eliminate the need for physical space. While we certainly don’t want to remove personal contact, save it for the instances when it’s most beneficial.
- Use the free storage cloud services. Nowadays, online storages and technologies help companies, startups, and businesses to centralize essential documents and increase collaboration in an alternative to paper documents and meetings.
7. Narrow Your Focus
As a startup or a business owner, try narrowing your business focus as it turns out to be the most effective strategy for improving these situations. Limit the services you offer and the projects you accept, and you’ll see that you’ll be more efficient.
Another different way to adhere to your business focus is to subcontract. Rather than turn away business, maximize your capacity by outsourcing services whenever possible. More projects provide more revenue increase, while subcontracting equals lower expenses and saves you time and effort. The result is a better profit.
8. Use Your Office Space More Efficiently
Analyze how you are using your current physical office. Do you maybe have storage with many supplies, piles of paper files, and inefficient furniture or computer equipment that can be resold or used for a different purpose?
See if you can consolidate different functions or departments of your business into one. Use employees and office space for more positions, projects, or clients if you see they could use more experience and have free time. A conference, office, or meeting room that can be used as a rest or playroom is good to be checked. The opportunities depend on the nature of your business or startup.
9. Use Your Employees’ Skills
Your Human Resources department needs to have stay-in interviews for regular check-ups and tracking the employee career development and every new skill, training, and certification they will get. See how your company is using your employee’s experience, competence, and technical and soft skills and reevaluate if you could use them better based on your employee career preferences and future growth. Be open for inputs and give responsibilities to the employees with the most competence and efficiency in those areas.
Do not use expert salespeople for writing articles, placing Excel “numbers” or design tasks. Although one person must be skillful for a variety of functions, consider exchanging some of the functions with someone who is a better fit for those tasks and needs less time in doing those tasks with efficiency. If you don’t have the right HR department, you can always outsource this, and you will see how useful it is.
10. Use Open-Source Software
Open-source software is a software that can be freely used, modified, and shared among the team. Programs like WordPress allow you to save money on website creation and various other functions, easy to modify, edit for everyone that understands the technology. We are happy to share that many of our clients use WordPress, so feel free to reach us for a free consultation.
11. Keep Quality Over Everything
In the long term, you would like everyone to remember you based on the quality of your services, which sells better no matter what your business offers. Happy customers and clients increase sales through referrals and repeat purchases. Higher quality and a solid reputation allow you to charge higher prices, which equals higher revenue and a healthier business model.
We know these insights are overwhelming, but they are crucial for every crisis and every small business willing to strive. See what more our experts have to suggest. Check what you have done well this past year and what are your next steps for improvement by scheduling a free consultation with our team of experts here.
Learn more about how you can cut costs with outsourcing talents with our support. Schedule a time to talk with our Cosmic Development team and start saving time and cutting costs.