In a tough economy, there’s one question on every business owner’s mind: How can I save my business money?
In this article, we will cover seven crucial money-saving strategies to help you cut expenses, save your business money, and “tighten your belt.”
1. Take advantage of Business Process Outsourcing (BPO).
Business process outsourcing (BPO) is nothing new. But it’s only in recent years, and thanks to advances in Internet technology, that BPO has really become a staple for many businesses that are looking to cut costs. Many businesses now outsource processes that aren’t critical to their core expertise. This includes things like human resources, customer service, and of course, bookkeeping and accounting. By outsourcing your business processes rather than hiring and maintaining your own in-house team, you can save a ton of money, time, and resources.
2. Don’t be afraid to negotiate with vendors.
Too often, businesses accept vendor pricing as written in stone and continue to pay the same rates for goods or services for the lifetime of the business. This doesn’t have to be the case! Don’t be afraid to get on the phone and negotiate for lower rates. Especially if you’ve been doing business with a particular vendor for a long time. Vendors are just like any other business. They want to keep their customers, and they’re just as susceptible to a rough economy as the rest of us. There’s no harm in trying for lower prices. You have a good chance of saving hard-earned money.
3. Find creative ways to reward employees.
If you’re trying to reduce costs, or just don’t have the cash on hand to award bonuses to high performing employees, there are many ways to show your appreciation – without breaking the bank. Instead of cash bonuses or pricey presents, try giving employees an extra vacation day, a VIP parking spot, or even employee of the month status. Take a little time to think of other creative ways to reward your team. You might be surprised with what you come up with.
4. Embrace the cloud.
Moving to the cloud is a great way to save money for your business. For one thing, cloud-based services are far cheaper than expensive in-house hardware and software. You save money on things like server maintenance, power and cooling, software licensing, and upgrades. On top of that, cloud computing uses less energy, so you’ll save on your utility bills as well. Cloud-based services are also extremely scalable. You only pay for what you use, without wasting money on things you don’t need. When you move to the cloud, you can easily scale up when you need to meet rising demand, and then back down during slower periods to save money.
5. Hire people with less experience but more passion.
Experience is expensive, and as we all know, the experience isn’t always everything. Next time you’re looking to expand your team, consider hiring people with less experience who are smart, motivated, and extremely passionate about what they do. You can always teach someone skills, but you can’t teach passion and dedication! When you write your job ads, consider replacing “Minimum years of experience” with “Recent college grads welcome to apply.” You’ll end up with lots of eager applicants who are excited to learn and looking for a chance to prove themselves.
6. Motivate and reward your profit-generators.
Sometimes you have to spend a little money to make money. If there are key members of your team who contribute directly to your bottom line, think about things you can do to reward and motivate them to keep making money. It can be anything from a bonus to a commission or profit-sharing arrangement. You can even use morale-boosting gestures, like a special parking spot or occasional free lunch. By spending a little bit of money on the people who generate a profit for your business, you can ensure that they continue doing their best to increase your bottom line.
7. Go paperless.
The cost of paper is expensive. According to INC Magazine, it costs $20 to file a paper document, $120 to search for a misfiled document, and about $250 to recreate a lost document. A standard filing cabinet of 15k-20k sheets of paper costs $25,000 to fill! Going paperless is a great way to cut back on expenses. Simple things like scanning documents and utilizing email more can help you cut back on costs like storage and printing. Ultimately, it can help improve overall efficiency.