Cost-Cutting Ideas for Businesses

Business owners know that when cutting costs, pennies add up.

Whether the economy is up, down or holding steady, lean, efficient businesses are strong businesses. Just like people, businesses accumulate fat over time. By reviewing expenses annually or more frequently, you can cut the cost of doing business significantly, freeing up more capital for growth and profit.

Technology

While technology increases business efficiency, specific products grow obsolete quickly. Maintain awareness of your technology and new developments in technology fields. Cost savings you might realize include swapping traditional phones for Skype or other VOIP-style phones, using cell phones instead of regular business phones, and using cloud computing instead of upgrading servers every year. Carefully inventory your technology needs and decide where you have redundancy that can be eliminated (replacing desktop computers with docking stations for business-grade laptops, for example) or a need for cost-effective upgrades.

Take Up the Slack

Every business has slack and down time. Track the time your space and expensive equipment is actually used, and look for business partners who can rent those things from you in your off-peak times. For instance, a law firm that has no meetings after 5 p.m. can rent out conference space to a therapist who needs after-hours space to meet with clients. If you have equipment that spends a portion of each year in storage, try to find someone to rent it during that time instead. Use the philosophy that for every moment you're paying for something, it should be bringing in profit.

Cut Waste

Use your newly-streamlined technology to eliminate unnecessary printing. PDFs can be read onscreen instead of printed and put in binders. Have applicants fill out forms digitally, and maintain files in a database instead of in a filing cabinet.

You can also cut down on waste by empowering your employees. Give each department or individual a strict budget for supplies and allow them to spend it as they see fit. Eliminate meetings in favor of uninterrupted quiet time to work, and instead actively solicit recommendations that would have come from meetings via email. According to software entrepreneur Jason Fried, uninterrupted blocks of time to work are always more productive than the same amount of time broken up by meetings and interruptions.

Reviewing your insurance policies and getting competitive bids from multiple insurers can also cut a chunk out of your budget, as can reviewing bills from phone carriers and other utilities that can easily be changed to cheaper providers.

Involve Your Staff

Even when you think you have your business running as efficiently as possible, your employees may think differently. Ask staff for cost-cutting ideas, and offer bounties for money-saving or money-making ideas you implement. You'll excite and energize your staff, get them invested in your success, and cut business costs all at the same time.

References

• PDA.com: Seven Ways To Cut Costs Without Cutting Your Lifeline
• Inside CRM: 78 Ways For Your Small Business To Save Money In This Economy
• CNN Opinion: Why The Office Is The Worst Place To Work