5 Ways to Reduce Business Costs in 2016
There is no doubt that running a business is expensive. This is an inescapable truth of entrepreneurship. This doesn’t mean, however, that you can’t do anything to curb your overhead or that you have to accept the status quo. There are plenty of tricks you can use to reduce what your business spends and, by extension, increase your profit margins. Here are five that have worked the best:
There is no law that says every position needs to be an in-house, full-time position. In fact, sometimes it is better to outsource a few of your systems to third parties. In addition to costing less than a full time employee, third parties tend to be more objective. For example, according to ADP Business Payment Solutions, outsourcing your payroll is a good way to “save time, money, and resources.” It also puts tax regulation compliance in the hands of experts, which is also a time, stress, and money saver. Other options for outsourcing include your IT and your company’s website management.
- Hire Freelancers
Hiring freelancers is one of the very best ways to curb your business overhead. Why? Because you only pay them for the actual work they are doing. You don’t have to worry about wasting money on a staff member who doesn’t have enough to do to stay busy all day. You also don’t have to provide benefits for your freelancers and they are responsible for their own tax prep. Another great benefit to using freelancers is that you can hire people from all over the world instead of limiting yourself to your local talent pool. Social media management, content creation, and content marketing are all great positions for freelancers.
- Go Green
The greener your business, the more money you will save. Going paperless, for example, saves on printing, supply, and maintenance costs. Using eco-friendly lights and low flow faucets and toilets helps save utility costs. There are so many money-saving ways to “green up” your business. Start implementing them today and watch your overhead drop! Finally, one of the best reasons to go green is the amount of money it will save your business in taxes. Implementing green measures can often be written off as business expenses come tax time.
- Use Smaller Offices
When you outsource and use freelancers as much as possible, your business’s spacial needs will shrink considerably. Sure your big, lofty offices might be beautiful but a smaller space will be cheaper across the board. The space itself will be cheaper to rent, lease, or buy (and you really should rent as it tends to be cheaper than buying). Smaller spaces are also easier and cheaper to heat and cool. You won’t need as much office equipment and the space will likely be easier and cheaper to decorate and keep clean.
- Allow Telecommuting
Telecommuting is something more and more businesses are learning to accommodate and for good reason! Telecommuting reduces the amount of sick leave your employees need to take to care for themselves and sick family members. It also reduces your employees’ commute costs (which is helpful if you provide company cars). Allowing employees to telecommute part or even full time also helps you better fit into the smaller office space into which you’ve moved. In addition to being cheaper for your business, employees who are allowed to telecommute are happier and more productive than those forced to work in-house full time.
These are just five of the ways that you can reduce your company’s overhead. There are plenty of other methods, large and small, that you can use to reduce your company’s overhead even further. Get creative! There are plenty of ways to reduce expenses, improve your profit margins, and build your business all at the same time.