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Ways to Cut Your Day-to-Day Business Expenses
Running a business is not always about boosting revenue, but about lowering expenditure too. Business owners often work as a one-person army when it comes to handling multiple operational departments, vendors, finances, etc. Several entrepreneurs focus on increasing sales; however, they must not forget to lower expenses where possible because cost-cutting is crucial to obtain or maintain profitability.
In any business (regardless of its size and type), lowering daily expenses is essential but not easy; it requires you to be creative and try out your own ways that you might have never walked on. Get more help from this article containing experts’ opinions on the same; read through it.
1 – Order in Bulk
Vinay Amin, Health Expert & CEO at Eu Natural
My products are manufactured by a specific company to detailed specs, which is costly but guarantees consistency and quality in my supplements. To reduce these overhead costs, I order in bulk and pay 50% upfront. Manufacturers are happy to offer significant discounts for large orders that ensure they secure the delivery.
I would recommend any business liaising with manufacturers to discuss bulk orders with a down payment to secure the cost.
2 – Work Remotely
Allan Borch, Founder of DotcomDollar
I own a digital startup with multiple blog sites. I and my employees (all 10 of them) work remotely. Over the years, this has saved me a lot of money that would have otherwise gone to paying rent for an office space. A quite large sum, especially for a new company.
A lot of business owners I know used to be skeptical about the effectiveness of having a ‘virtual office’ setup. However, the current health crisis has forced many to transition into doing so and are slowly warming up to the idea. Renting office space is one of the biggest expenses in any business. You feel it even the key is to have a plan before heading out to your local Costco or Trader Joe’s.
Bottom line: With enough research and a detailed plan, operating a business with a ‘virtual office’ setup would end up being more cost-effective in the long run.
3 – Outsource Service When Needed
Ben Reynolds, CEO & Founder at Sure Dividend
The first way we’ve saved money over the last six years is by working remotely. We were doing it long before the pandemic. This saves us from rent, utilities, furniture, copier leases, and all the other costs of an onsite office.
Next, we hire a minimum of employees. When we need extra help, we outsource to freelancers. Using sub-contractors saves us on taxes and prevents us from paying people when we don’t have enough work for them.
By doing our work online, we don’t have to file reams of paper, which save us on paper, filing cabinets, and the space to store it all. Plus, we’re helping the environment as well as our bank account.
4 – Focus on Saving from Wherever You Can
Robert Stam, CEO and Online Marketing Expert at SEO Mandarin
As an SMB, which is operated remotely, keeping my overheads to a minimum is a critical aspect of remaining profitable. I’d like to share my cost-saving tips with your readers. Working from home at a minimum requires light, a computer often with dual screens, and an air conditioner. Being mindful of electricity consumption is one of the simplest ways WFM businesses can lower their overheads:
- Work in an area of natural light, so no electrical light is needed
- Use power strips for your laptop and computer screens, which are easy to turn off once you have finished using them
- Set automatic interval timers on your air conditioner to have it turn on for 10 minutes every hour
- Choose energy-conscious vendors who source energy from cheaper, more eco-friendly renewable sources
5 – Use Free Trials of Services
Neal Taparia, Founder of Unscrambled Words
To save or avoid costs, you can continuously use free trials of services you need. Sign up regularly to them using different credit cards and email addresses, and you’ll get continued free access. If you have to, use the credit cards of people on your team or family credit cards.
Yes, it’s a bit cumbersome to do this every week or month, but if you need to save costs, every dollar counts.
6 – Stick to Your Budget While Searching for The Best Deals
Elena, PR Manager at Airfocus
I try to plan a weekly budget and stick to it at all times. This means setting aside a certain amount of money that covers all of my expected costs and a little over that for unplanned things. The weekly budget is very economical, and I try not to spend more money than I need to.
Consequently, whenever I have to purchase certain items or choose a service, I am already limited by a budget, so I have to search for the best deal actively. People have become impatient, and they often spend a lot of money simply because they buy the first thing they see. However, a little self-discipline can help them develop healthy financial habits and save on a daily basis.
7 – Improve Time Management & Hire Freelancers
Thomas Hawkins; CEO & Owner of Electrician Apprentice HQ
One of the best ways to cut day-to-day expenses when running a business is to improve your own time management skills so you can take on more roles. You can certainly free up time to take on some of the more mundane tasks related to accounting, and you might even be able to head up your social media campaign, especially if you’re just beginning. Remember, the more you can take on (without losing focus on your long-term goals), means fewer payroll dollars spent. Also, instead of investing in expensive marketing campaigns that vary by nature, you could always scale that back and simply network more. If you can garner five new clients through networking who refer your business to five of their friends each, that probably beats a paid advertising strategy every day of the week.
And finally, in almost all businesses, especially those in the early stages, hiring freelancers instead of full-time help, will most definitely reduce day-to-day expenses. The fact of the matter is that full-time, 40 hours per week paid positions are few and far between in the world of business. You’re better off hiring freelancers for one-off type work and even for other positions where the work, task, and responsibilities tend to be sporadic. It’s kind of an a la carte approach, but it will save you dollars.
8 – Three Steps Toward Minimizing Expenses
James Kilpatrick, Founder of BeanieCoffee
- Find your trusted vendors. We all know that buying in bulk can save you some money. However, there is a better way to do that. Find a vendor that you trust to have some discounts while getting quality products. Also, don’t forget to inform the vendor of your allotted budget for the product. This will get you the best suggestions on what products you should purchase.
- Recycle. Find if you can still give a second life to your wastes. We do this by using a compost pit for our biodegradable wastes, recycling, and selling some leftover wastes from our products like cardboard, plastics, and paper.
- Maximize your workforce. Designate multiple responsibilities to your employees. However, make sure that these would be something they could handle.
9 – Follow These Simple Tips
Lewis Keegan; Founder & Writer at Skillscouter
To be able to cut your day to day expenses, you can opt for any of these following tips:
- Cook meals instead of buying fast food or readymade meals. Aside from cutting your expenses, this can also assure you that what you are eating is clean and that you will not contract the virus in any way through food.
- Check your subscriptions. Cancel the subscriptions you don’t need or rarely use, such as your gym subscription (if you can opt to work out at home instead) or magazine subscriptions (when you can simply browse on the internet). You can also check your premium subscriptions to apps and see if you can live with the free version.
10 – Try Fixing Things Yourself
Meaghan Thomas; Owner, Pinch Spice Market
Our biggest savings wins have come from leveraging WooCommerce extensions, WordPress plugins, and custom CSS instead of hiring developers to resolve our website issues. We were recently quoted $15,000 to fix two functionality issues on our website. Instead of eating that cost, we instead spent the weekend searching online for the right plugin solution and specific CSS code to fix the issues ourselves. It was surprisingly simple despite the developer’s large quote.
If you’re having a problem with your website, chances are you’re not the only person in the world to experience this issue. Spending time exploring plugins and learning basic coding can save you tens of thousands of dollars. You’ll be surprised how much you can do when you dive into developer forums and try fixes yourself. The big caveat to this cost-savings hack is always to back up your site before you change anything!
11 – Apart from Cutting Down Expenses, Find Ways to Earn More
Aaron, Founder & Editor of TestPrepGenie
Here are some of the ways we cut down our day-to-day expenses based on our company business.
- Make sure that your employers are working productively. In the ESL industry, we need to ensure that our employees are maximizing the use of their time to reach out to the numbers of clients. With this, there would be greater profit for the business itself, and more tasks would be completed in time.
- Use technology in conducting meetings. This is the best way to cut your transportation expenses for meetings. With lots of communication tools out there, doing this wouldn’t be a problem.
- Maximize the space of your business. If you can use a room for multiple purposes, do it. If there are other available spaces in your building, you can use it as a rental space for other businesses. This is a good way to aid the expenses of your company.
Bottom line: Do not just try cutting down the expenses of your company. Find other ways for your company to earn more.
12 – Two Things You Can Focus on for Minimizing Expenses
Alicia HoughJob; Corporate Wellness Expert at The Product Analyst
- Minimize subscription users. Most companies avail premium subscriptions, and everyone gets access to it. Now that you want to save money, it’s better to limit those subscriptions to employees who really need it for their work tasks. If required, they can also borrow accounts from eligible employees to save cost in premium packages that give the app access to everyone.
- Limit pantry budget. Tell everyone that since the company is trying to cost cut, the pantry will only get limited supplied for as long as needed. It won’t hurt everyone should there be less stocks in the pantry. Keep in mind that it’s better to keep everyone in the team rather than procure stocks for the pantry.
13 – The Four-step Strategy
Daniel Carter; Founder of Zippyelectrics
- Maximize the skills and talents of your employees by giving them some tasks and responsibilities they can manage doing.
- Use technology to advertise your business. Use social media instead of paying for traditional marketing strategies.
- Avoid applying for unnecessary loans for your business.
- Track the day to day accomplishments of your workers to be certain of the continuous productivity and growth of your business.
14 – Three Valuable Tips for Cost Savings
Adem Selita, CEO & Co-founder of The Debt Relief Company
- Gamify Budgeting – There is definitely a connection between saving money and having a well-planned budget. Business owners with concrete budgets keep track of their spending more and therefore are much more conservative in how they spend. Like anything else, this is a habit and skill we must learn to build on and practice repeatedly.
- Evaluate the Opportunity Cost of Your Money – The last thing you want to do is have thousands of setting in a savings account accruing 1% interest while paying 20% APRs on your credit card balances. The biggest mistake I see both individuals & business owners make is that they do not utilize their funds appropriately and towards paying down a high-interest credit card or loan debt.
- Pandemic Savings/Negotiation – The pandemic has presented many minor opportunities to cut monthly bills. During a recession, essentially, every expense becomes negotiable. This is a spectacular mindset to have while trying to achieve your saving goals. Whether it’s VoIP phone plans, rent payments, utilities, internet providers, subscription expenses, etc., all the above are negotiable. All that’s required is that you call your service providers and negotiate better terms on your bills (this should really take 20 minutes with each provider and should net you a sizeable amount of monthly savings).
15 – Find the Best Deals Suited for You
Andrew Roderick; CEO of Credit Repair Companies
With the pandemic having a major part of redundancies, you may be thinking of cutting down on your expenses and trying to save a few pennies to see you through until you are able to find another job. Couponing is a great way to get some amazing deals on groceries, which can really help in reducing your monthly spending. Set aside a couple of hours a week to go through magazines, newspapers, and pamphlets to find the best deals suited for you. Also, look to switching from branded items to stores own, these are considerably cheaper and generally taste the same.
16 – Grab Cashback Rewards
Jeff Neal; Engagement Officer at The Critter Depot
We are a business, who is always keeping a close eye on our expenses. Something we did was switch to a business credit card that offers 2% cashback. We pay all of our expenses with this credit card and pay off the balance weekly. The benefit is that we can effectively reduce *all *of our expenses by 2%, due to the cashback reward. This has saved us thousands of dollars over the course of the year. But it’s only effective as long as you pay off the balance.
17 – Outsource Accounting Functions
Laura Fuentes; Operator of Infinity Dish
Outsourcing is one way I have cut back business expenses. I outsource my accounts payable and have saved not only money but space in the office that can be utilized for something else. I am currently considering offering my office as a coworking space. COVID has made some of my employees switch to remote work indefinitely at this point. I see no reason to change that since we are running efficiently, so sharing my workspace with another company will save me a considerable amount of money each month to be invested in other areas.
18 – Look at Your Past Month’s Expenses
Brian Robben, CEO of Robben Media
To cut day-to-day expenses, it’s simple but not easy. First, get a pen and paper. Draw a line down the middle of the page. Then look at your past month’s expenses, and for each line item, put necessary expenses on the left and unnecessary on the right side of the line. By necessary, I mean anything that’s advertising to bring in new clients and fulfillment of those sales. Everything else should be cut. This exercise will shine a light on all the wasted expenses to get rid of.
19 – Embrace New Technology
Jennifer Willy, Editor of Etia
Understanding and analyzing financial statements is essential if you want to improve your fiscal situation. Operating expenses consist of maintaining and administrating day-to-day activities. One way to reduce these operating costs is to embrace new technology. Why? Because it not only improves efficiency but also reduces human error and involvement. It also reduces the cost of shipping raw material.
Secondly, there are many expense trackers out there that can help you. The recommendation would be Expensify: Receipts & Expenses. It tracks your receipts and manages expenses on the go. Expensify can also categorize and code each receipt and can even automatically submit business expenses for approval and reimbursement.
Business runs on cash flow; while ensuring you have collected all payments, you must focus on handling accounts payable on time (to avoid additional late payment fees). These are small but essential considerations you should not ignore and always choose where to invest and where you can lower expenses.
The above-shared tips and suggestions will help business owners cut costs, which is a great way to save more and boost cash flow for all business types, regardless of their size. At Cogneesol, we help SMBs around the globe manage accounting back-office processes. We offer quality accounting outsourcing services at a competitive price, helping you save up to 60% on your accounting costs.
Learn more about our services; to get a free trial, call us today at +1646-688-2821 Or email at firstname.lastname@example.org.
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