Expenses are Piling up. How do I go about Cost Cutting?

Two aspects determine the size of your bottom line. One is the number of sales you get in dollar amounts and the other is the dollar amount you save by cost cutting or, operational savings. While most entrepreneurs pay more attention to growing sales, it takes a trained eye to keep a  watch on mounting expenses, some of which are unnecessary.

Sometimes there, you might need to cut costs and spend less on operational costs without disturbing the customer experience. Today is Day 20 of my April Blog Challenge and today I’m going to write about a few methods I have found very useful in substantially keeping your spending low and adding value to the bottom line.

Cancel recurring services when they’re not really necessary.

Sometimes we take up subscriptions of programs, online software or services that we think are necessary for a while. Most times we grow out of the need to use these services in 3 to 6 months but totally forgot about cancelling them. Periodically run an eye on all the subscriptions you have during a month, and cancel what doesn’t serve you any more.

Have staff working only during peak times.

Unless you have full-time employees under contract, cut employee time when they have no tasks or business activities going on. If you run a store, you might probably want to man the store all by yourself during noon to 3 PM or whenever it’s very quiet for your store in terms of foot traffic.

Cut down on physical meetings.

If you’re a Solo-preneur working from home, consider telephone meetings, digital coffee over actually going to meet a client at a coffee house. When you conduct a meeting from your office, you not only save commuting time and cost, plus money and calories on that unnecessary coffee and snack Also guess what, your productivity also stays high as you can just put your phone down and go back to work without getting distracted.

Hire interns for simple administrative tasks.

If you have lots of easy tasks like filing, photocopying organizing paperwork, hire an intern who will cost you about 0 to 50% of your employment costs. The Ontario Government through its Wage Subsidy Programs funds a lot of summer programs and youth unemployment programs and it would certainly benefit your business to have the government pay for some of your employees.

Sublet unused space.

If you have a large office and you’re paying a lot of rent on it, do what I did. I sublet my large office to two other professionals who paid most of the rent that’s saving me a lot of money for my pocket. Commercial rent is a killer and there are many professionals out there who are constantly looking for shared space and yours could be one of them.

Renegotiate everything.

If your telephone or internet plan is up, renegotiate a new plan. Plenty of companies will happily give you a lower plan if you threaten to leave the company for another.

Renegotiate your commercial rent. Renegotiate any commissions, vendor services or shared profits that you currently engage in. Strategize into ways of saving money or maximizing profits in every negotiation.

Fire unprofitable customers.

Yes, you heard it right. Please fire those customers that are a constant pain in the butt. After four years of serving a certain client, I realized that I’m spending more money in trying to retain them than the money that actually comes from the client.

This client I mentioned demanded the steepest discounts and every freebie that could come their way, while my cost of serving them did not come down, I had ended up spending money from my pocket just to keep this client. Letting go of this client added about 3% more to my bottom line every month.

Use freelancers and contract workers for miscellaneous work.

If you have in-house employees for content writing and social media, or bookkeeping or repetitive administrative tasks, analyze the hours spent by this employee and determine whether it’s worthwhile to keep them on for 40 hours of pay per week. My agency has taken over a lot of employee work and saved  companies thousands of dollars in payroll. Because what costs an employer 40 hours in payroll might just be 10 hours in freelance work.

If you’re struggling in your business to cut costs to improve your bottom line, please get in touch with me. Within a few hours of consulting we could identify and work through all those nitty-gritty details that are dragging you down. Sometimes it takes an external set of eyes and mind to look into your business and create tailor made strategies just for you.