Effective Methods to Reduce Operating Costs You Might Not Have Considered

The cost of small businesses can be discouraging to say the least. Most entrepreneurs are unfamiliar with the landscape, and can’t even anticipate the unexpected road bumps and expenses that will continue to accumulate. This is why reducing daily expenses and ensuring positive cash flow is so important in the early stages of small business development. After all, you have to “spend money to make money,” but you don’t want to be downright broke before your business even gets off the ground.

Thankfully, there are examples to be learnt from about how to deal with the cash-crunch and how to reduce small business costs. People who have done it before swear by these methods when it comes to reduce costs while preserving quality and productivity.

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reduce small business cost

1. Save Money on Utilities: Go Green!

While you may be looking at the sticker price of a “green” electronic like a printer, or LED lights, the truth is that you save much more money in utilities over time – these pieces essentially pay for themselves. Don’t keep throwing money into inefficient office equipment. Think about replacing older computer monitors that require a ton of electricity just to boot up, or getting a new thermostat for your work area to keep down heating and air costs. Such small steps, while an expenditure in themselves, can help reduce small business cost in the future to a great extent.

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2. Stay Green: Reduce Paper and Digitize

You do not need to keep every piece of paper. As a small business owner, you’re probably terrified to throw away documents, even if you’re nearly positive you’ll never need it again. But to save every piece of paper means you need a filing cabinet, a backup system, a person to file all that paperwork, someone to pull that paperwork, etc. Why not just digitize everything, and place it in a cloud-based application with backup? Organize by date, by subject, by client, etc., and then you can search for the document whenever you need it. And the best part? You can always print it if you need it again.

This also decreases cost because you can send digital documents, contracts, and paperwork to clients – no more costs associated with printing and shipping! You can become a more efficient office when everyone can work on the same document online and share it – rather than printing, mailing, returning, scanning, etc. Digital documents are the way of the future; embrace them!


3. Shell Out for Backup

Sure, this part may seem a little bit expensive and sort of the opposite of “reducing startup costs,” but the value provided over time is worth it. Purchasing a backup server, external hard drives, or hiring a remote server host to backup your software, computers, online programs, documents, and more will all ensure that you do not have a costly crisis on your hands. Most startups have hiccups with their computer systems at some point; why risk being the one that loses everything you’ve worked so hard for?


4. Look to the Cloud

Cloud computing is probably one of the greatest things to happen to the business world. Consider everything you can do from a cloud-based management system. You can work, you can make sure your employees are working, you can save/send/share documents, and you can access your data from anywhere. You’re probably thinking, “Yeah, but cloud computing is insanely expensive! My startup can’t afford that!” But what many businesses are finding is that there are highly customizable cloud options for any business – you don’t have to pay annual fees or buy suite programs that have more than you need. Options like Windows Azure and Amazon AWS let you scale your cloud computing based on your needs, a sort of “a la carte” option for small businesses. This helps save you money in the long run, as data centers and remote servers can cost businesses upwards of $100,000 to start and maintain. Cloud computing can cost half that or less!


5. Code Your Own Software

If you’re open to learning something new, or hiring someone to help you, you can save a ton on software costs. Open-source software, which is software that you can change and fit to your needs, can help you by making your systems truly yours, rather than investing thousands in something that only “sort of” fits your needs. Just buy the license to cheaper open-source software, and edit it to your heart’s desire. It’s expected that open-source software saves business owners and consumers about $60 billion per year!

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6. Third Party Software-as-Service (SaaS)

Why bother with software at all? Save money by using mostly free, mostly web-based third party SaaS (software-as-service) programs. For example, you can find customer relationship management (CRM) programs, invoicing programs, content management (CM) systems, and antivirus software – all online. Why spend money on the rights to the software when you can access the free (or close to free) third party SaaS when you need it? You can use this as a way to save money until you can afford the software you want, or until you understand better what your business needs are.


7. Delegate the Drudgery

Most small business owners can’t stand the daily tasks they have to muddle through; email, calls, scheduling, invoicing, etc. all on top of client work, networking, promotion, and actually doing the work the business is for! Even if you have a small team of employees, it never helps to seek outside help for the smaller, more specialized work. Freelancers can create a website, write, strengthen your online presence, and so much more. The best part? They’re often experts in their field but you can actually afford them because you’re not putting them on payroll. Contracted workers save you tons of time and money. Better yet, save your sanity and hire a virtual assistant or an agency who can take care of the real minutia of the business; payroll, email, client scheduling, etc. You don’t need to pay an arm and a leg to keep someone in your office; technology has made it easy to find people who can do these things from anywhere in the world. Put your money into growing your business – not running it! Use these seven simple steps and get growing today.