7 Best Ways to Significantly Reduce Your Company Expenses
What is the first thing that comes to your mind while talking about the financial growth of a company? Profits and revenue, probably? What about the expenses?
If you think of the company’s financial strategy as a sport, profits and revenue can be categorised as the offensive tactics, with financial growth as the final goal. It is these expenses, however, that dictate the availability of remaining funds and what you can do with it—much like a defence.
Therefore, calculation and planning of your expenses is extremely essential for your organisation.
The nature of operations has evolved in every industry. The priorities concerning money have changed as well. What was once a prominent expenditure of a company—say, paper—may not be as important as the world becomes more digitised.
Let’s understand a few sustainable hacks to manage your company’s expenses in the current scenario.
7 steps to Achieve Stable and Prosperous Company Finances
For years, people have discussed various ways to save money in businesses. In a highly competitive market, reducing expenses is essential to keep your firm thriving. Some simple changes can help you save a generous amount.
1. The Social Media Frenzy
If you look at the closest person to you at this second, chances are that they’re on their phone. Online platforms have revolutionised the way people consume information. It’s all about social media presence.
“According to a GlobalWebIndex , a person spends approximately three hours on social media platforms every single day. Furthermore, 28% discover brands and 42% do product research on these sites.”
Needless to say, social media has an incredible reach that could be used to a company’s advantage.
A good social media presence can increase brand visibility, introduce new products or services and build a loyal customer base. This advertising model is significantly cheaper than the traditional forms of media.
2. The Work-From-Home Amid a Pandemic
In the wake of a pandemic, work-from-home has undoubtedly become the new normal for the next few years. While some consider it an inconvenience, it can have the opposite impact. For an organisation, property and equipment can account for major costs. By enabling work-from-home strategies, you eliminate the need for a working space altogether. So, you’ve already saved rent.
Those who work remotely, more often than not, use their own devices. You’ve also saved the money spent on gadgets for your employees. Remote working also allows you to reduce your employees’ expenditure on commuting and food. By simply deploying a remote working environment, you can save generously.
3. The Solution of the Cloud
Cloud solutions are one of those cutting-edge technologies that have changed business operations in recent years. With more and more people turning to the Internet, companies began understanding the importance of digitalisation. Additionally, advanced technology simplifies many arduous processes.
Take customer service, for example. Cloud telephony and IVR (Interactive Voice Response) has allowed callers to reach agents quickly and be served efficiently. Using powerful features of cloud telephony, the call is rerouted to the agent best-suited for the query.
Another example is cloud storage. Cloud storage has allowed people to store data online, eradicating the need for data silos. The latter used to cost companies a hefty amount. But with cloud-based solutions, organisations can store and retrieve data as well as collaborate with others at a fraction of the price.
4. The Supply Chain Reaction
Your supply chain may constitute the largest fraction of your expenditure, along with your rent. Hence, it needs to be closely monitored and periodically audited.
When you consistently evaluate your supply chain, you can pinpoint areas where costs can be cut or a better deal can be struck with another supplier. Either way, keeping an eye out for changes in your market can help you procure supplies at a lower rate.
Another way to reduce costs is by simply being aware of the market and your supplier’s competitors. This information will help you negotiate and fetch a fair price for the goods.
5. The Best of the Employees
Take a moment and consider the process of recruiting a new employee in your organisation. This includes the interview, the paperwork, the training, the cultural acceptance and finally, matching the productivity of the previous employee.
As you can understand, the process is quite time-consuming. But guess what, it not only takes time but also money. A lot of it. Hence, it is important to ensure that employee turnover is minimum so that your company does not have to face frequent bouts of hiring.
Employee engagement must always be a high priority. It is the loyalty and commitment of an employee to the company. High engagement reduces the employee turnover rate and ultimately, the cost of recruitment. It is an underrated saving that an organisation can leverage. After all, engaged employees also display higher productivity leading to increased profits and customer satisfaction.
6. The Rent Issue
As the owner of a start-up, it often seems more practical to own a workspace since it is an investment for the long-term. However, since the nature of modern businesses is constantly evolving, it is wiser to rent out a property until you can afford an office according to your requirements. This reduces your capital investments and allows you to pour money into other capital-intensive purchases.
The same formula can be applied to expensive equipment and personnel. For the former, several manufacturing units are often in need of expensive, heavy-duty machinery. Instead of increasing your assets for an enormous loss, why not rent it out? This way, you do not have to account for the depreciation of the machine either.
As for personnel, renting here means freelancing. Make use of freelancers that wish to work with you. Credible freelancers can provide you with high-quality work without demanding a month-long salary. You can pay them on a project to project basis. This way, you keep your payroll small, but can still access staff when required.
7. The Efficient Energy
The last step is simple. As they say, “you have to spend money to make money.” Invest in good quality appliances instead of settling for cheap options. Energy-efficient appliances will reduce your electricity bills significantly and last longer. Additionally, they are also a more environmentally conscious choice.
A dime here, a nickel there—saving a little in several places will result in saving a lot for your business.
Firstly, by keeping your office space up to date in terms of technology, you can streamline operations and reduce the cost of obsolete devices. Secondly, keeping your supply chain under regular surveillance gives you an upper hand during negotiations and pricing. And thirdly, renting or encouraging remote working allows you to invest less in a workplace.
Saving money and reducing expenses in business is imperative, especially as a new business. Even a minuscule amount saved can make a difference in the accounts and budgeting of your firm. Hence, save that buck and follow these steps to reach the state of prosperity you seek!