Cutting costs and improving performance often seem to be at opposing ends of the spectrum in business. Naturally, any time you reduce the amount of time, effort, or money that you’re putting into something, it’s reasonable to expect that you might see decreased results in that area of the business. After all, those old sayings “what you put in, is what you get out” and “you get what you pay for” certainly do hold true in most cases. However, as with everything else, there are exceptions and loopholes that will allow you to deviate from typical expectations by achieving comparable or even enhanced results while spending less. With that said, here are 7 ways you can reduce your business expenditure without hurting your profits or the quality of your products or services:
1. Study Operations Management and Workflow Process Mapping
If you really want an advanced understanding of how to manage the daily operations of a business in the most efficient and cost-effective manner, you may want to complete a relevant degree program. For example, you could earn an operations management degree online from Kettering University on your own schedule. That way, you’d be pursuing an education that will essentially make you a professional at corporate efficiency and all the topics that come with it, including frugality, workflow management, and productivity. If you’re not interested in completing an entire degree program, you could take a short course on workflow process mapping or corporate efficiency instead.
2. Consolidate Tasks and Projects to Fewer Employees
If you employ more than a handful of people, there’s a possibility that you could be throwing money out the window in the form of excessive payroll expenditure. For the sake of redundancy, many companies understandably hire more than the minimum number of needed employees. Still, if frugality is your goal, then it’s always best to start by looking for ways to downsize. If you can have one employee handling a workload that was previously split up amongst three workers, that’s two whole salaries that you’ll no longer have to pay, not to mention an easier accounting process. Plus, by putting more work into the hands of your best employees, you give them the opportunity to fully refine their craft because they’ll always be busy making progress instead of sharing the workload with a bunch of slackers or amateurs.
3. Use Energy Efficient Devices and Appliances
If your company is using hardware that isn’t energy-efficient, upgrading to newer models could help you reduce your monthly utility bills. Of course, this tip is primarily useful for companies who own and operate a lot of equipment, devices, and appliances on-site and have a large electricity bill. This is also a better move to make if you have business credit sufficient to secure you approval for a reasonable monthly payment plan, as that would keep you from having to invest a significant amount in a down payment. Alternatively, you could find that you’d rather have no monthly payments and opt instead for outright purchasing with some of the funds obtained through the liquidation of your old equipment.
4. Switch to a Paperless Office
Buying and using paper simply doesn’t make sense in most modern businesses because there’s almost always a way to handle the exact same process digitally without spending a penny on paper, ink, or electricity to power a printer, scanner, fax machine or any other archaic technological dinosaur. Obviously, you might want to hold onto your printer because you may need to print something on rare occasions, and it may be wise to keep a few printed and laminated copies of your essential financial records and information, but other than that you should try to completely eliminate the use of paper in your company.
5. Outsource Work to Freelancers
If you’re managing a startup that can’t currently afford to pay for that kind of in-house assistance, it would probably be best to work with freelancers on a per task or per project basis. It’s also wise to practice the aforementioned advice related to consolidating tasks when working with remote freelancers because it’s usually better to have 5 fully committed and highly skilled full-time employees than to have 10 or 15 partially committed, moderately skilled employees on a rotating schedule. Covering the salary or hourly wages of multiple employees can add up to a major expense on an annual basis, so it’s smarter to only pay for labor as it is needed.
6. Optimize Space Management
If you’re running a physical shop or an online business that needs to store inventory and equipment, you could save money or generate additional profits by managing your operating space more efficiently. This could allow you to continue operating while paying for less storage space, or give you the ability to better showcase your products or fit more products in your retail store. Rearranging a place of business is something that you can do yourself at no cost, so at a bare minimum it will be helping with your organization.
7. Start Leveraging Free Advertising Methods
While it’s always preferable to invest in top-notch marketing services when possible, you could also be generating brand awareness and momentum for your brand in your spare time using free or low-cost promotional methods like social media and video marketing. Any kind of content that you can personally create to get the company more exposure or leads could be considered a money-saving effort because you’ll be reducing your dependency on third-party marketers.
Remember that Cost is a Critical Corporate Performance Metric
Let’s not forget that cost is an essential metric that every corporation tries to reduce as much as possible. When you’re generating and reviewing quarterly reports to see how much recent progress your business has made, you’ll be happy to see that you’ve been spending less money without losing any clients, customers, contractors, or orders in the process. By utilizing the 7 approaches listed above, you’ll have a solid framework for finding and mitigating reducible expenses.