Managing company finances can feel like a tough task. That is why it is sometimes a good idea to get back to the financial fundamentals. Think about the simple money math. For example, the more your company saves, the more your company makes in terms of profits. The lower your expenses and utilities are, the more your business saves. That is basic business profitability for any company.
Increase Monthly Income And Save Money With This Company
Saving money for your business practicing frugal finance sounds simple, right? Cutting company costs is the simple and perfect solution to all your biz woes right?
But cutting costs for your company is not always that easy. Every company has to navigate different types of expenses to save money for your business.
Where can you save money, and where should you leave things as they are for your business expenses? One of the easiest ways to start saving is by comparing electricity suppliers. If you live in Houston, for example, you have the power to choose your electricity provider. Comparing different rates and detecting potential savings is a must if you want to keep your company's expenses under control.
You are hopefully ready to save money for your business on all types of expenses to reduce overhead and improve profitability. It won't always be easy, but it will be necessary to pump up profit margins. And we are ready to help your company out with its fiscal fitness right here at Frugal Finance.
Saving money for your business practicing frugal finance sounds simple, right? Cutting company costs is the simple and perfect solution to all your biz woes right?
But cutting costs for your company is not always that easy. Every company has to navigate different types of expenses to save money for your business.
Where can you save money, and where should you leave things as they are for your business expenses? One of the easiest ways to start saving is by comparing electricity suppliers. If you live in Houston, for example, you have the power to choose your electricity provider. Comparing different rates and detecting potential savings is a must if you want to keep your company's expenses under control.
You are hopefully ready to save money for your business on all types of expenses to reduce overhead and improve profitability. It won't always be easy, but it will be necessary to pump up profit margins. And we are ready to help your company out with its fiscal fitness right here at Frugal Finance.
Read on and discover 7 surefire ways to cut company costs and improve your bottom line.
7 Ways To Reduce Company Expenses
1. Use Low-Cost Advertising Methods
Traditional advertising is expensive. Whether you are running a PPC campaign or buying space in relevant magazines, the costs add up quickly. The truth is most small businesses can't afford the level of advertising necessary to see worthwhile results.
That is why many are turning to more cost-effective advertising solutions. If you rely on your website to convert customers, then turn your attention to search engine optimization. By improving your site's ranking, you will get more eyes on your business and thus more customers.
Even brick-and-mortar locations can benefit from inbound marketing, such as creating informative articles and YouTube videos.
2. Reduce Your Job Requirements
Experienced workers expect larger salaries. And that experience doesn't always translate into additional profits for your company. When you are filling a vacancy in your business, ask yourself if you really need an employee with five years of in-person training.
By hiring recent graduates, for example, you can afford to pay them much less. Although they are lacking in real-world knowledge, they will have the education they need to fulfill the role. Just be sure you choose candidates who excel at learning on the job.
3. Take Advantage of Frugal E-Commerce Platforms
On the low end, creating an e-commerce website will cost you tens of thousands of dollars. That is an expense that not every small business can afford. And even if it is in the budget, is it really a wise purchase for an ecommerce company on a shoestring?
Don't disregard e-commerce options that are readily available. Your business can use sites such as eBay, Amazon, and Etsy to curate and distribute sales. Yes, they will take a little off the top, but you will still save thousands as you increase sales volume.
1. Use Low-Cost Advertising Methods
Traditional advertising is expensive. Whether you are running a PPC campaign or buying space in relevant magazines, the costs add up quickly. The truth is most small businesses can't afford the level of advertising necessary to see worthwhile results.
That is why many are turning to more cost-effective advertising solutions. If you rely on your website to convert customers, then turn your attention to search engine optimization. By improving your site's ranking, you will get more eyes on your business and thus more customers.
Even brick-and-mortar locations can benefit from inbound marketing, such as creating informative articles and YouTube videos.
2. Reduce Your Job Requirements
Experienced workers expect larger salaries. And that experience doesn't always translate into additional profits for your company. When you are filling a vacancy in your business, ask yourself if you really need an employee with five years of in-person training.
By hiring recent graduates, for example, you can afford to pay them much less. Although they are lacking in real-world knowledge, they will have the education they need to fulfill the role. Just be sure you choose candidates who excel at learning on the job.
3. Take Advantage of Frugal E-Commerce Platforms
On the low end, creating an e-commerce website will cost you tens of thousands of dollars. That is an expense that not every small business can afford. And even if it is in the budget, is it really a wise purchase for an ecommerce company on a shoestring?
Don't disregard e-commerce options that are readily available. Your business can use sites such as eBay, Amazon, and Etsy to curate and distribute sales. Yes, they will take a little off the top, but you will still save thousands as you increase sales volume.
Or just purchase a discount domain name with a frugal website host and start selling on WordPress or Weebly if it is cheaper than Shopify, WooCommerce, and BigCommerce options.
If you are really set on owning an e-commerce store, choose to go with a premade solution. These have limited functionality, but your budding business likely won't need the versatility of a custom option. One of the best premade solutions on the market is Shopify.
4. Slash Shipping Costs
Turn to the mailroom when you need major cost-cutting strategies. Shipping rates can vary between services and parcel sizes. By shopping around or changing distribution methods, you can effectively lower your overhead.
Negotiating even a small rate change can lead to big savings. Imagine making an extra dollar every time you ship a product. And if you've never audited your mailing network before, you can likely save much more.
USPS postal rates increase every year. Search for cheaper shipping solutions to pass the savings on to your customers or grow your business. Or even consider using a reputable 3pl service that is cost-efficient.
5. Work From Home
The location of your business will have a major impact on your monthly rent. For example, a New York office will cost you an annual $14,800 per employee. But the question is, do you even need an office?
You may not need a physical space depending on your product or service. And if you don't, then why pay for one? Telecommuting is an easy way to keep a low overhead.
Many employees also enjoy the flexibility of working from home. In fact, you may be able to offer a lower salary with this incentive.
When an office space is a necessity for some positions, you can still have the others telecommute. Maybe you need warehouse workers to handle distribution. But does your accountant need the office space?
You can get a smaller office with fewer workers. And that means much lower rates.
6. Cut Unnecessary Types of Expenses
What kind of incentives are you dishing out for your employees? If things are getting tight, it may be time to re-examine that luxury coffee machine in the kitchen. Nobody likes their perks being taken away, but it's better than having to downsize the company and let people go.
And it is not just about incentives. Cut your power bill by hooking all electronics to power strips. At the end of the day, you can turn these off to avoid losing money to standby power.
Anytime you make a payment, ask yourself if the service is necessary. And if it is, ask yourself how you can find ways to cut costs.
Over time, these small changes can lead to big savings. This can't be overstated enough for small businesses or bootstrapped startups on a lean budget.
7. Negotiate Better Rates
Every business works with a variety of vendors, whether they're selling office supplies or product materials. You should know that your rates are never set in stone. One of the best ways to cut company expenses is to head to the negotiation table.
You have more power than you might think when it comes to cutting company costs. Many vendors are willing to lower their rates. For them, making less money is better than making no money.
Do your research beforehand to see what others are paying. Renegotiating doesn't carry a large risk, but you don't want to insult your vendors with a ridiculous request.
Types of Expenses: Know When to Save and When to Spend
In general, cutting certain types of expenses in business is worthwhile. But you can't cut everything, even if you are a fervent frugal finance enthusiast. Sometimes you will profit in the long run by investing in things that truly matter, such as your product, employees, and partners.
It may appear counterintuitive, but employee happiness can lead to increased productivity and retention. By paying more now, you'll get more value later and save on certain types of expenses your company could be liable for. Sometimes you do have to spend money to make money, as long as it is done reasonably and frugally whenever possible.
For more advice for your small business, head to the business category on our Frugal Finance blog. Frugal Finance is crushing company costs worldwide!
If you are really set on owning an e-commerce store, choose to go with a premade solution. These have limited functionality, but your budding business likely won't need the versatility of a custom option. One of the best premade solutions on the market is Shopify.
4. Slash Shipping Costs
Turn to the mailroom when you need major cost-cutting strategies. Shipping rates can vary between services and parcel sizes. By shopping around or changing distribution methods, you can effectively lower your overhead.
Negotiating even a small rate change can lead to big savings. Imagine making an extra dollar every time you ship a product. And if you've never audited your mailing network before, you can likely save much more.
USPS postal rates increase every year. Search for cheaper shipping solutions to pass the savings on to your customers or grow your business. Or even consider using a reputable 3pl service that is cost-efficient.
5. Work From Home
The location of your business will have a major impact on your monthly rent. For example, a New York office will cost you an annual $14,800 per employee. But the question is, do you even need an office?
You may not need a physical space depending on your product or service. And if you don't, then why pay for one? Telecommuting is an easy way to keep a low overhead.
Many employees also enjoy the flexibility of working from home. In fact, you may be able to offer a lower salary with this incentive.
When an office space is a necessity for some positions, you can still have the others telecommute. Maybe you need warehouse workers to handle distribution. But does your accountant need the office space?
You can get a smaller office with fewer workers. And that means much lower rates.
6. Cut Unnecessary Types of Expenses
What kind of incentives are you dishing out for your employees? If things are getting tight, it may be time to re-examine that luxury coffee machine in the kitchen. Nobody likes their perks being taken away, but it's better than having to downsize the company and let people go.
And it is not just about incentives. Cut your power bill by hooking all electronics to power strips. At the end of the day, you can turn these off to avoid losing money to standby power.
Anytime you make a payment, ask yourself if the service is necessary. And if it is, ask yourself how you can find ways to cut costs.
Over time, these small changes can lead to big savings. This can't be overstated enough for small businesses or bootstrapped startups on a lean budget.
7. Negotiate Better Rates
Every business works with a variety of vendors, whether they're selling office supplies or product materials. You should know that your rates are never set in stone. One of the best ways to cut company expenses is to head to the negotiation table.
You have more power than you might think when it comes to cutting company costs. Many vendors are willing to lower their rates. For them, making less money is better than making no money.
Do your research beforehand to see what others are paying. Renegotiating doesn't carry a large risk, but you don't want to insult your vendors with a ridiculous request.
Types of Expenses: Know When to Save and When to Spend
In general, cutting certain types of expenses in business is worthwhile. But you can't cut everything, even if you are a fervent frugal finance enthusiast. Sometimes you will profit in the long run by investing in things that truly matter, such as your product, employees, and partners.
It may appear counterintuitive, but employee happiness can lead to increased productivity and retention. By paying more now, you'll get more value later and save on certain types of expenses your company could be liable for. Sometimes you do have to spend money to make money, as long as it is done reasonably and frugally whenever possible.
For more advice for your small business, head to the business category on our Frugal Finance blog. Frugal Finance is crushing company costs worldwide!
