There comes a point in the life cycle of every business when taking measures to reduce spending is unavoidable.
But even a whispered rumor about downsizing is enough to send your staff into a panic. While they’re busy worrying so much they can’t pay attention to their jobs, you’re stuck trying to figure out how to cut costs without laying off employees.
Fortunately, slashing business spending doesn’t require letting any of your talented team members go. You can cut costs – not corners – with a smarter approach to money management in other areas.
Audit Current Business Spending to Reduce Costs
Admit it: You have no idea where some of the money in your business is actually going. It’s a common problem for small business owners. Things get crazy, you stop updating the books on a regular basis, and you suddenly find yourself staring at a stack of receipts for things you don’t remember buying.
Get this cycle under control with a serious assessment of all business costs. Start with a list of the essentials, such as:
- Rent
- Utilities
- Payroll
- Inventory
- Insurance
- Credit card or loan payments
After these, list other routine purchases that aren’t strictly necessary for operations.
Finally, make a list of things you buy but don’t really need. Take an honest look at these lists, and get serious about making cuts, including paying off problematic debt. Create a plan for better budgeting going forward, and stick with it.
Since the insanity of doing business will inevitably distract you again at some point, it might be a good idea to invest in a bookkeeping service to keep spending on track, and reduce the time you spend on monitoring operations.
Use Employee Retention Strategies to Minimize Recruitment Costs
High employee turnover is expensive. Did you know replacing a team member who makes $30,000 to $50,000 a year can cost up to 20 percent of their salary?
That’s $6,000 to $10,000 getting siphoned away from business operations to pay for recruitment and training!
It makes a lot more sense to retain top employees instead. Keeping people around not only saves you money but also increases efficiency by:
- Ensuring familiarity with business practices
- Maintaining cohesiveness in the team
- Improving morale
- Supporting a strong company culture
If you want your employees to stick around longer, start them off well with a stellar onboarding program. Don’t just go through the motions of training; really work at getting people comfortable with their part in the vision and goals of the company.
Employees also stick around longer if they feel valued. What’s the best way to show them you care?
You can give incentives, but the thrill of these is short-lived compared to what today’s employees really want: opportunities to advance. Education and training to strengthen skills and prepare for higher positions makes for a happier, more satisfied workforce.
Embrace Low-Cost and No-Cost Marketing Ideas
Increasing marketing while cutting costs is a bizarre paradox of the business world, but it works. Why? Because marketing brings in customers, and customers bring in cash. More sales with fewer expenses translate to higher profits overall.
There are plenty of ways to power up your marketing without emptying your business bank account, including:
- Build up an engaging presence on social media
- Stay connected to your audience through an active email list
- Send out special discounts and coupons to loyal customers
- Nurture existing business relationships to grow your network
- Leverage your employees’ networks to connect with new customers
- Announce company milestones with press releases
- Optimize your online presence for local search
With a little trial and error, you’ll find the best – and cheapest – marketing plan for your business.
Cut Costs by Adopting Digital Business Solutions
While a totally paperless office may be a pipe dream, that’s no excuse to waste money on unnecessary printing. Paper and ink are expensive, and costs add up fast if you’re still relying on inter-office memos and giving everyone huge packets at every meeting.
A better solution? Go digital.
Cloud-based applications for communication and collaboration, such as Slack and Basecamp, keep your team connected without any messy paperwork.
Payroll services digitize and automate time-consuming administrative tasks. Best of all, paperless billing and invoicing make it much easier to track payments without the need to juggle a stack of statements from multiple vendors.
Digital applications are also great for supporting a mobile workforce. Giving staff members the option of working from home cuts down on office costs and fulfills the growing desire among workers for flexibility in their schedules.
Check out virtual meeting apps like GoToMeeting or Zoom to keep remote employees in the loop.
Find the Services You Need to Cut Costs in Business Now
Streamlining business spending is easier with a little help. Business services like those available from National Business Capital support your cost-cutting efforts through strategic automation, smart optimization and fast processing.
Choose one service or a combination to create a perfect formula for lowering costs without letting any of your valued employees go.