Entrepreneurs are between a rock and a hard place. They need to spend money to build their enterprises, but they also need to cut costs to the bone and avoid any kind of waste whatsoever.
Fortunately, there are a bunch of strategies that you can use to reduce costs in ways that don’t harm your business operationally. It just takes a little know-how. Here’s what to do.
Stop Spending Money On Extra Office Space
With remote working taking off, many business leaders are wondering whether they need the office at all. But if you still think that a central working space is necessary for your business, you can save costs. Don’t rent out an entire building for yourself – or even a separate room. Instead, make use of coworking spaces and adjust your rental according to the number of people you expect to use it at any given time.
The cost is that you’ll have to work alongside other firms. The benefit is that you get a formal space without the usual price tag (or long-term rental agreement for that matter).
Employ Family Members
This tactic is a little cheeky, but it is something that 90 per cent of new businesses can do to get their operations off the ground. Instead of going to the competitive marketplace where labor costs are high, cut your staffing costs by employing family members.
All sorts of people could be available to help with the donkey work. Children, grandparents, parents, nieces, and nephews – you name it.
Get them to do the simple tasks so you can focus on the tough stuff. Pay them something, but make sure that it’s way less than the going market rate. Promise them big rewards in the future if things work out.
Use Cheaper Shipping
Logistics prices can vary dramatically depending on the types of services that you use. For instance, if you hire an entire truck, you’re going to pay more than if you simply rent the space you need. Instant FTL freight shipping quotes tend to be suitable for companies wanting to fill an entire shipment, but LTL quotes might be better if you’re looking to send a small amount of merch.
Barter Goods And Services
When cash is tight, you’re often better off trading your time or inventory. And sometimes there are opportunities to do this. For instance, you could offer your consulting services to an accounting firm in exchange for free tax advice.
Use A Bicycle
While running a car might seem like a necessity for many businesses, you can often get things up and running with no more than a bicycle and access to public transport links.
You might also want to consider leasing vehicles by the month. This way, you can get rid of them if you no longer require them and reduce your sunk costs and depreciation risk.
Slashing business costs, therefore, is straightforward once you know how to do it. It’s just a question of finding a tactic that works for you. Once you get your expenses down, you’re much more likely to thrive.