Running a business can easily get expensive. Some business owners are even having a hard time to break-even. The cost of running a business can get really high. This is especially if the business is just new or starting out.
Bloomberg has reported that around 8 out of 10 businesses actually close within the first 18 months. The truth is that businesses just won’t survive if profitability is becoming unlikely. While it’s important for business owners to increase their sales, it’s also crucial to make sure that profits are still coming in.
Most of the time, the expenses of a business could be what’s hindering a business’s profitability. This is one of the first things that business owners should focus on to guarantee profits and to keep the business going. Here are some great tips on cutting down costs and expenses for bigger profits.
Hire contractors or freelancers
A business’s workforce is something that many owners are spending a lot on. For small businesses or if a lot of work is not really necessary on a daily basis, consider hiring contractors or freelancers. This can ensure that you’re only paying for the work that’s done.
Generally, contractors and freelancers are a lot cheaper to hire. Despite the lower rates compared to regular workers, many freelancers nowadays are extremely competitive. You’ll find that you’re getting your money’s worth from these people.
Allow workers to work fewer hours
If your business already has regular employees and you don’t want to let them go, you can just reduce the hours that they are working. Just make sure that your business can still afford to lose manpower hours.
When it comes to reducing the hours of your employees, you need to make sure that it’s their choice or their request. Make sure that their contract also allows this. If it doesn’t, you can still negotiate with them and explain why it is necessary.
Review legal expenses
This is also one of the largest expenses of a business or company. However, not all businesses require this. If your business could survive without hiring a law firm or lawyers to check on contracts and transactions, then just don’t sign with law firms.
Legal counsel may be necessary from time to time so you can just talk to a few lawyers and ask for their rates. Check if you can pay them hourly or only for consultations. The mindset that you should have is that not everything needs to go to court when it comes to business problems.
Ask for discounts or better deals in utilities
This is another big expense that businesses have. Utility bills are, of course, more expensive when you’re running a business. This sometimes depends on how big your business is. You need to be smart when it comes to dealing with this.
What you can do is to seek the help of business utility experts like Utility Builder. They could help you pick and negotiate the best utility deal for your business. Companies like this are typically partnered with gas suppliers and could help you manage your electricity and water bills.
Utilize social media for marketing strategies
It’s important that you don’t turn to expensive advertising right away when you need to get your product out. Ask your marketing team to utilize the power of social media. Make sure that your team has at least one person who is an expert at this.
Take advantage of the fact that social media platforms like Facebook and Instagram are free. Sure, you might need to pay a few bucks to boost your ads on these platforms, but the amount you’ll pay is nothing compared to how much advertising agencies will charge you.
Everyone seems to be on social media platforms nowadays and use this as an advantage for you to market and sell your goods. You can create a Facebook or Instagram account and start raving about your business or products.
If you have products that you want to sell, you can look for social media influencers who could team up with you to promote your goods. This is basically paying online celebrities to flaunt your products and this is proven to be effective for many businesses.
Consider purchasing used equipment
Whether you’re just starting out and you need office equipment or you’re just looking to upgrade what you already have, consider purchasing used items or equipment instead. This will definitely save you a lot of money.
You just need to find a trusted and reputable shop or sellers for this to make sure that you’re getting a good deal. Many used equipment is sold on its top shape and you’ll just be happy to know how much you can save because of these.