Many businesses are looking to find new ways to stay afloat due to the pandemic’s impact on cash flow in recent times, amongst other things. One of the best ways to get your business back in decent financial shape is to cut your business costs.
You might think that cutting business costs back is likely to be a painful process that will have a negative effect on your company as a whole, but it really doesn’t have to be that way, as you will see below.
1. Renegotiate with your suppliers
Right now, one of the best ways to cut your business costs as painlessly as possible is simply to phone up your suppliers and ask them for a better deal. If you have always been a good customer who pays on time and puts a lot of business their way, there is a very good chance that they will agree to better terms because they will not want to lose a good customer in such uncertain times.
Even if they only offer a small discount, if you use many products, this could add up to significant savings in the future.
2. Team up with other businesses to negotiate bulk deals
Another way you could potentially save money on essential business supplies is by teaming up with other small businesses in your area that use the same/similar supplies. By teaming up, you can put a bulk order in with the supplier and benefit from the, often generous, discounts that come with doing so.
3. Go paperless
If you haven’t already digitalized your business, now is the perfect time to do so because not only has the technology to do so, including cloud computing, never been more available, but it has also never been cheaper.
So how does going paperless help cut costs? Well, obviously, you won’t need to buy nearly as much paper or ink, nor will you need to spend a fortune on having your printers serviced and repaired or for document storage facilities.
As well as all that, when everything is stored digitally, it can help your employees be more productive, which may not save money, but it should certainly help you generate more profit going forward.
You could be forgiven for thinking that outsourcing various aspects of your business would lead to higher costs, but the reverse is true. A good example of this is in IT. Most companies rely to a large extent on their IT systems to always be up and working. To ensure this is the case, you could employ an IT team on full pay, but that would cost you tens of thousands of dollars annually.
Alternatively, you could seek as and when needed IT support from a company like Netstar, which would be much cheaper because you wouldn’t be paying the regular salaries, taxes, and benefits that you would need to pay if employing an IT department full-time.
That’s just one example, but it’s easy to see how big savings can be made by outsourcing more processes than you are right now.
5. Sell waste products
Okay, so this isn’t always possible but if you run a business that manufactures a product and you end up with one or more waste products, as a result, see if those products can be sold on instead of recycled or sent to the local dump.
This is because many industries need everything from waste paper pulp to used coffee grounds to manufacture their own products. It is an excellent little way of effectively cutting the costs of your raw materials if you can recycle them. It will also help to bolster your own business’ green credentials too.
6. Make price comparisons
We tend to think of price comparisons as something we do as private consumers to get cheaper energy bills or car insurance. Still, there is no reason why you cannot always use them to find more affordable business insurance or bank accounts, for example, and doing so at least once a year is a great way to shave some of your costs without it causing you any pain.
7. Avoid getting into debt
Although it is sometimes inevitable that you will need to use credit to keep your cash flow – well flowing. You should aim only to take on debt if there is no other way to finance your project or if you have carried out a thorough cost-benefit analysis and found that using credit is the most cost-effective solution for you right now.
Interest payments are a significant drain of resources, and if you can avoid them for your business, you probably should.
8. Learn SEO
Learning SEO is a great way to cut your marketing budget. If you can more effectively advertise your company online, you will not need to spend so much on paid advertising solutions which can be very expensive. SEO skills are also highly sought after, so knowing the basics is only ever going to be of benefit to you.
Business automation is starting to become a reality. It makes sense to automate as many of your company’s processes as you possibly can because tasks are likely to be completed with a higher degree of accuracy. In addition, by relying on automation, you need less human staff to keep your business ticking over. This means much lower costs over time.
10. Consider going remote
This obviously won’t work for every business. Still, if you have the ability to go remote, it is definitely worth considering since you can ditch the expensive office space and the costs that come with keeping it warm, clean, and safe and plow that money back into your business instead.
As you can see, there are so many things you can do to cut your business costs without it having a painful effect on your business, and although you probably can’t or don’t want to do them all, implementing just one or two of these solutions should have a really positive effect on your cash flow.