Half the battle of running a profitable business is keeping your expenses down.
This is particularly important for growing businesses, as profits often don’t grow in line with revenue if gone unchecked.
To help you keep your overheads as low as possible, in this short guide we’ll walk you through six simple steps you can take today to save your business money.
- Review your marketing spend
Getting the word out about your business is key to its success.
But if you’re looking to tighten the purse strings, your first step should always be to review where your marketing budget is going and what the return on investment on each activity is.
A key thing to keep in mind here is that not all marketing campaigns are created equal.
For example, if you’re trying to build brand recognition on a national scale, PR and traditional advertising are likely to be the most effective avenues for your business.
That’s going to be a very different story if you run a niche e-commerce store, where SEO and PPC are more than likely going to be your biggest earners.
As a business owner, it’s crucial to regularly analyse which marketing channels are giving you the highest return on investment – double down on those and leave what isn’t working behind.
- Renegotiate with your suppliers
When it comes to reducing your outgoings, it’s important to remember that the deal you enter at the start of a relationship with a supplier isn’t set in stone.
Suppliers want clients who give them a lot of business, pay on time, and don’t give them any headaches.
If you tick all these boxes, you’re in a strong position to renegotiate your rates using .
This could be a quick way of shaving hundreds, or even thousands, off your monthly bills.
- Outsourcing rather than employing
Salaries are most business’s biggest overhead.
However, you might not be getting all you’re paying for when it comes to your in-house staff, with a recent study revealing that the average British office employee does just three hours of actual work per day.
What’s more, the hiring process can be long and laborious, while it can be equally difficult and costly to get rid of an underperforming or disruptive employee.
That’s why it’s well worth considering outsourcing tasks to a freelancer or agency when the time comes to expand.
This is especially useful if you’re looking for a specialist skill on a short-term basis, such as web development, legal advice, or digital marketing.
If you’ve never hired a freelancer before, follow for the best results.
- Are you green enough?
To make your business more eco-friendly, you need to reduce your carbon footprint and cut back on unnecessary waste and emissions.
In short, you need to become more efficient.
This isn’t just good for the planet – it’s great for your bottom line as well.
You can make your business’s premises as energy efficient as possible by ensuring they’re fully insulated, all halogen lightbulbs are replaced with LEDs, and all the windows are double or triple glazed.
Bear in mind that if your premises need a lot of work to be made fully eco-friendly, it could be more cost-effective to relocate.
You might also want to replace all company cars with eco-friendly upgrades, update old office equipment with newer, more efficient models, and conduct meetings over the phone or via video conferencing software instead of travelling to have them in-person.
- Could you go virtual?
If you and your staff only need a laptop and an internet connection to do your work, you could significantly reduce overheads by ditching the office entirely and joining a growing number of companies going fully remote.
This not only completely removes the cost of renting or buying premises – it also opens up the talent pool you can access to the whole world rather than just those near to your physical premises.
Of course, running a remote business isn’t all plain sailing – especially if most of your staff have never worked remotely before. To make sure you implement remote working as effectively as possible, be sure to read REMOTE: Office not required, a how-to guide to running a remote business from the founders of Basecamp (a fully remote tech company).
- What about an apprentice?
Apprentices can bring a wealth of benefits to your business, increasing productivity, future proofing your business and boosting your brand image at the same time.
But the key advantage of bringing an apprentice on board is that you can upscale your workforce for a very low cost.
What an apprentice lacks in experience, they’ll more than make up for in eagerness to learn and training them to fit the specific needs of your business gives you a great advantage in the long run.
How much you pay an apprentice will depend on a few things like their age, the sector they’re working in and which region they’re based in, but the cost is significantly lower than recruiting at a higher level.
- Run the numbers: work out how much you could save by implementing each of the money-saving tips we’ve listed here
- Begin implementing these cost-cutting measures, starting with what you think will have the biggest impact on your bottom line
- Constantly be on the lookout for new ways to cut costs in your business to ensure it’s running as efficiently as possible