10 Simple Ways to Cut Business Costs - American Express

1. Reduce supply expenses. · 2. Cut production costs. · 3. Cut costs on financial accounts. · 4. Modernize your marketing efforts. · 5. Use ... SkiptocontentBusinessCardsViewAllBusinessCardsCompareCardsCorporateCardProgramsForStartupsForLargeCompaniesPaymentSolutionsInternationalPaymentsEmployeeSpendingVendorPaymentsAutomatedPaymentsViewAllPaymentSolutionsBusinessClassBusinessClassInsightsandInspirationtoHelpGrowYourBusinessManagingMoneyCashFlowFinancingTaxesGettingCustomersMarketing&SalesCustomerRelationsDigitalToolsSocialMediaStrategyBuildingYourTeamHiring&HRCompanyCultureLeadershipProductivityPlanningforGrowthStrategyGrowthOpportunitiesResearchOperationsTrendsandInsightsManagingMoneyCashFlowSavingMoneyJune13,202210SimpleWaystoCutBusinessCostsRoyaleScuderiBusinessPartner,Consultant,Specialist,BusinessConsultantSummaryCuttingcostsinbusinesswithacostreductionstrategycanhelpyoufindtheextracashtogetmoredone.Learnhowtocutcostsinbusinesswiththesetentips.Inanuncertaineconomy,wheneverypennycounts,eventhesmallestincreaseinrevenueorcostcuttingcanimpact companyprofitability.Thegoodnewsisalarge-scalecompanyoverhaulisn'tnecessary.It'softensimple,commonsensestepswithinacost-reductionstrategythatimprovethebottomline,especiallyforsmallbusinesses. Theendoftheyearisanexcellenttimetostepbackandlookcarefullyatyourbusinesspractices,butanytimeoftheyearwillsuffice.Takesometimetoconsiderwhatyou'redoingwellandwhereyoucanimprovebeforeyouimplementcost-cuttingmeasuresforbusiness.  Cuttingcostsinbusiness canbetrickyifyoudon'tknowwheretostart.Keepreadingtofindouthowtocutbusinesscoststosaveyoumoneyinthelongrun. HowtoCutCostsinBusiness 1.Reducesupplyexpenses. Youcandosomecostcuttingonofficesuppliesbyshoppingaroundtocompareprices.Lookoutsideyourpooloftraditionalvendors.YoucanfindaffordableofficesupplieswithlargediscountsupplierslikeAmazonBusiness,Walmart,andUline,whocanoftenbeattraditionalofficesupplyprices. 2.Cutproductioncosts. Asabusinessowner,it'scommontolookforwaystocutcostsonmaterialsandoptimizeyourresources.Hereareafewsuggestions: Trysellingleftovercardboard,paper,andmetalinsteadofsendingittotherecyclingcenter.Also,considerwaystouseyourwastetocreateanotherproduct. Makesureyou'regettingthemostoutofyourproductionrealestate.Centralizeorconsolidatethespacenecessaryforproduction.Leaseunusedspacetoanotherbusinessorindividual—itcanbeassmallasanofficeorasbigasawarehousespace. Trackandmeasuretheoperationalefficiencyofyourbusinesstoadjustandoptimizetheuseofavailableresources.Setperformanceparametersthatreflectyourefficiencygoalsandofferincentiveswhenthosegoalsaremet. 3.Cutcostsonfinancialaccounts. Lookatyourinsurancepoliciesandfinancialaccountsforplacestostartcostcutting. Savemoneyoninsurancebycomparingprovidersforthemostcompetitiverate,thenaskyourcurrentlenderorinsuranceprovidertomatchthatrate. Consolidateinsurancepoliciesorbankaccountsifpossible. Evaluateinsurancepoliciestomakesureyou'renotover-insuredorduplicatingcoverage. Don'ttakeonunnecessarydebt.Doathorough cost-benefitanalysisandfutureforecasting whenconsideringbusinessexpansion.Considertheopportunitycostsandtheeffectofdebtpaymentsoncashflow.Excessdebtaffectscompanyrating,interestrates,andtheabilitytoborrowinthefuture. 4. Modernizeyourmarketingefforts. Ofcourse,youdon'twanttoeliminate paidadvertising thatisworking;however,itcanbeworthwhiletolookatcheaperalternativestohelpyoucutbusinesscosts.  Buildyourcustomeremaillistandimplementareferralprogram.Arecommendationfromacurrentcustomercanbemorelikelytoresultinasalethantraditionalmarketing.Createemailmarketingcampaignsthatwillwowyourcustomers.Providethemwithspecialdiscountsandcouponsjustforsigningup. Networkmore,advertiseless.Clientsaremorelikelytohireabusinesswithafacetheyrecognize.Theywanttohearmoreaboutyourbrandstoryandwhatgoesonbehindthescenesthanyousellingaproduct.Takethetimetoforma solidrelationshipwithyourclients. Increasesocialmediauseandreducetraditionalmarketing.ConsidercapturingnewleadswithvaluablecontentrelatedtoyourbusinessonplatformslikeInstagram,Facebook,Twitter,orYouTube.   5.Useefficienttimestrategies. Optimizingproductivityeffectivelyhelps cuttingcostsinbusiness.Remember, wastedtimeequalswasteddollars. Minimizedistractionsbyusingappslike FocusBooster or RescueTime tohelpemployeesfocusandstayontask. Utilizesoftwaresuchas Connecteam and Toggl totrackemployeetimeusage,timespentondifferentworkactivitiesorprojects,andbillablehours. Setexpectationsforareasonableamountoftimetocompletecertainactivitiesortasks.Offerincentivesformeetingorexceedingthoseexpectations. Schedulebusinessactivitiesandencourageemployeestoadheretothedailyorweeklyschedule. Scheduleapredeterminedblockoftimeformeetings.Makeitclearthatyouexpectparticipantstobeontime,stickcloselytotheagenda,andwrapupattheappointedtime. 6.Cutcostswithvirtualtechnology. Addvirtualtechnologytoyourcostreductionstrategy.TheeffectsoftheCOVID-19pandemichaveshownjusthoweffectivebusinessescanbeby operatingremotely.Virtualmeetingshelpminimizetravelexpenses,andvirtualofficescaneliminatetheneedforphysicalspace.  Whilewecertainlydon'twanttoeliminatepersonalcontactaltogether,saveitfortheinstanceswhenit'smostbeneficial.Manyorganizationsutilizetoolslike MicrosoftTeams andSlacktocommunicatethroughouttheworkdayandholdvirtualmeetingsonvideoappslikeZoom,GoogleMeet,and CiscoWebex.    Technologiessuchas GoogleDrive and MicrosoftSharepoint centralizecompanydocumentsandproductcollaborationasanalternativetopaperdocumentsandmeetings.Bycostcuttingwithvirtualdocumentsharing,youcansavelargelyonofficeessentialssuchasink,printerpaper,andevenpostage. 7.Narrowyourfocus. Asasmall-businessowner,Ifindnarrowingmybusinessfocustobeoneofthemosteffectivestrategiesforcuttingcostsinbusiness.BylimitingthetypesofservicesIofferandprojectsIaccept,Iammoreproductiveandproducehigher-qualitywork. Anotherwaytonarrowyourbusinessfocusistosubcontract.Ratherthanturnawaybusiness,maximizeyourcapacitybysubcontractingpieceswheneverpossible.Moreprojectsequalmorerevenue,whilesubcontractingequalslowerexpenses.  8.Makethemostofyourspace. Analyzeyourcurrentuseofphysicalspace.Overflowingstorage,toomanysupplies,pilesofpaperfiles,andinefficientfurnitureandequipmentplacementarecommonspacewasters. Consolidateorcentralizethedifferentfunctionsordepartmentsofyourbusiness.Usespacefordualpurposes.Forexample,ameetingroomdoublesasabreakroomorastorageroomthatholdscopymachines.Theopportunitieswillvarydependinguponthenatureofyourbusiness. 9.Maximizeyouremployees'skills. Ifyou'restillsearchingforhowtocutbusinesscosts,youcanassessthecurrentusageofyouremployee'sexperienceandskills.Youcouldbelosingmoneybyemployingpeopleinthewrongpositions.Giveresponsibilitiestotheemployeeswiththemostskillandefficiencyinthoseareas.Don'tuseexpertsalespeopleforwordprocessingor"numbers"peoplefordesignfunctions.It'softennecessaryforonepersontoberesponsibleforvarioustasks,butconsiderexchangingsomeofthosetaskswithanotherindividualwhoshowsgreaterefficiency. 10.Hireanexpertincostcutting. Ifyoufinditchallengingtocutcostsinbusiness,youmaywanttohireanexperttocreateanefficientcostreductionstrategy.AnaccountantoraCPAcangiveyourbusinessacleansweepandshowyouhowtocutbusinesscosts. Learninghowtocutcostsinbusinessisessentialtosavingyoubothtimeandmoneyyear-round.Implementingtacticslikereducingyoursupplyexpenses,utilizingvirtualtechnology,andcombingthroughyourfinancialaccountscanmakeasignificantdifferenceineffectivelycuttingcostsinyourbusiness.You'llfindthatthereismoreroomtoputyourfinancestowardwhatmattersmostinyourorganization. AversionofthisarticlewasoriginallypublishedonJune19,2012. Photo:GettyImagesWanttoDigDeeper?ProductivityBuildingYourTeamManagingMoneyCashFlowSavingMoney