It isn’t easy to run a small business on a tight budget, which is why business owners are looking for neat ways to cut down their daily operational costs and keep their company afloat. The trick, however, is to strike a balance between reducing costs and maintaining the product/service quality.
The good news is that there are many ways to reduce your company’s operational costs while optimizing the efficiency of your team. Below are five ideas to help you reduce your overheads.
1) Invest in the Latest Technology
There are several free online software programs available that allow your business to perform a myriad of functions. These include website hosting, accounting, payroll, CRM, and more. If you’re still not sure about the right service or program for your business, then ask yourself the following questions:
- Which process is taking an undue amount of time every day?
- What are the processes that can be automated?
Once you’ve answered these two questions, you will get a clear understanding of what type of technology you need.
2) Outsource Your Key Functions
There are some areas of the business that can’t be performed by purely relying on technology. It might be helpful if you could outsource some of the processes that aren’t a core area of your business. This includes telephone answering services. For many entrepreneurs, their biggest pain point is not getting enough leads and sales. This can be addressed by outsourcing marketing and advertisement to more experienced consultants who specialize in lead generation.
3) Telecommute to Save Money
Travelling to and from the office space can quickly drain your budget. The good news is that technology now allows you to communicate with your employees from the comfort of your home. This, of course, requires you to implement a more mobile-friendly policy at the workplace such as flexible BYOD rules. A starting point to facilitate remote working is to allow employees to bring their own devices at the workplace without imposing any restrictions.
4) Pay Invoices on Time
Many vendors appreciate it when their clients pay them within time. Vendors often demonstrate this ‘appreciation’ by offering discounts for invoices that are paid earlier or on time. This might not add up to much, but a discount as small as one or two percent can definitely help you redistribute your monetary resources on core areas of the business, such as product quality and client satisfaction.
5) Identify and Remove Bottlenecks
It is always a good idea to actively look for processes that are making your business inefficient. You can reduce waste by tightening up your procedures and processes, and eventually decrease costs. A good idea is to conduct weekly meetings with your employees and actively look for processes that can be refined. Don’t snooze off when your employees pitch something!