When you run your own business, it\u2019s not always smooth sailing. Sometimes you need to cut costs to stay afloat\u2014now more than ever. <\/p>\n\n\n\n
When it comes to saving money for your small business, you might have more options than you think. Whether you need to reduce expenses temporarily or over the long-term, small changes can have a big impact. <\/p>\n\n\n\n
In this article, we\u2019ll cover three key questions that will help you build a cost-cutting strategy followed by our favorite money-saving tips to get you started:<\/p>\n\n\n\n
Making smart choices starts with a realistic timeline.<\/p>\n\n\n\n
Think about your answers to the timing questions above. These will help you decide whether your cost-cutting strategy needs to: <\/p>\n\n\n\n
What are the costs your business can\u2019t do without? For example, you might not need that premium e-learning subscription right now, but you definitely need an internet connection. Every business spends some money on things that aren\u2019t strictly necessary but that make life easier.<\/p>\n\n\n\n
If we want to cut costs radically, we should look at what our businesses need to exist. Everything else that\u2019s \u201cnice to have\u201d can potentially be cut. <\/p>\n\n\n\n
Not sure if something should be on your \u201cnice to have\u201d list? Ask yourself how long you can run your business without this item and what would happen if you didn\u2019t have it. <\/p>\n\n\n\n
The specific requirements are different for every industry and every business. Once you have your list, review each item. See if you can:<\/p>\n\n\n\n
For most businesses it\u2019s the recurring costs, not the one-off expenses, that make the most difference to your bottom line over time. By reducing these monthly or annual costs, you essentially make it cheaper to run your business. You might be able to pause some too and resume when things get better. <\/p>\n\n\n\n
Here are some recurring cost you could save on:<\/p>\n\n\n\n
The biggest steps would be moving to a smaller office or working from home. You can also consider sharing your workspace with others to share the rent. <\/p>\n\n\n\n
Check your policies to make sure they\u2019re up-to-date and you\u2019re not paying for more coverage than you need. Shop around if you\u2019ve been with the same insurer for a while.<\/p>\n\n\n\n
Switching to a different bank or a different type of account might save money. If you take payments in lots of different currencies, looking into a borderless bank account like Transferwise could help you save on currency conversion fees. <\/p>\n\n\n\n
With so many free or freemium options available online<\/a>, you can find versions of most business software at low prices. Or maybe you don\u2019t need the service at all\u2014you could go back to writing invoices manually for a while instead of using billing software, for example.<\/p>\n\n\n\n Get advice before you change any retirement or pension plans. Reducing payments to save money through a difficult time should be a worst-case and temporary option only. <\/p>\n\n\n\n How often do you use your company phone vs. online chats, video calls, and emails? Do you really need a monthly plan or is a prepaid option enough? Most phone providers will let you check your average monthly usage online and if not, contact them to request this information.<\/p>\n\n\n\n If you need to commute, see if there are cheaper options if you travel at a different time. Do you need to be \u201con-site\u201d every day? Look at your schedule and see if there are days you could work from home, even if just once a week.<\/p>\n\n\n\n Business clubs like your local Chamber of Commerce can be great for networking and often come with great membership benefits. But they can be pricey so if you\u2019ve joined one, find out if you can pause your paid membership temporarily. These organizations might also offer support for members in need.<\/p>\n\n\n\n Under normal circumstances, it\u2019s great to set money aside every month in a savings account. In financially challenging times you can stop those payments and use the money to cover essential expenses.<\/p>\n\n\n\n How much speed and bandwidth are you paying for? Would a different provider give you the same for less? Can you do your work with a cheaper option? Sometimes calling your provider and asking if they can lower your monthly bill actually works!<\/p>\n\n\n\n Price differences are usually not very high between providers but if you use many electrical appliances for your work, switching providers might be worth it.<\/p>\n\n\n\n Do you leave the heating in your office or workshop ticking over even when you\u2019re not there? While this can save you cranking up the heat when you arrive at work it\u2019s also a luxury you can do without. Adjust your thermostat settings and make sure you\u2019re not wasting money on unnecessary heating. <\/p>\n\n\n\n These are the things you buy when your company needs them. Look for these purchases in your bank statement: <\/p>\n\n\n\n A business lunch doesn\u2019t have to be fancy. And coffee and tea at the office don\u2019t always have to be from expensive big brands. Different choices help you save.<\/p>\n\n\n\n You want to work with the best tools<\/a>. But if you can\u2019t afford the best tools right now, try working with refurbished laptops or sending devices in for repairs instead of replacing them. <\/p>\n\n\n\n It\u2019s nice to have a certain look, but this might be a good time to cut back on company-branded t-shirts, gifts, and other extras.\u00a0There are also many affordable tools to create a business card<\/a> or other branded items you might need. <\/p>\n\n\n\n This is a time to keep your team together. So instead of cancelling, look for cheaper options. Have a games and pizza night at the office instead of cocktails downtown. <\/p>\n\n\n\n Canceling already purchased tickets helps your cash flow. And even for free events, reconsider your visit. Would it be better to spend that time on your tasks or will this event bring in new customers?<\/p>\n\n\n\n If you\u2019re cutting costs, professional development might need to be postponed or canceled. That could be different if you are learning a new skill that will help you serve a broader range of customers. Consider free or cheaper courses to cut costs.<\/p>\n\n\n\n Are there ways your marketing costs can be reduced? If you\u2019re on a budget, make sure to only advertise to target audiences who are most likely to buy from you, or look more closely at free ways to promote your business<\/a> like creating a professional logo to help customers recognize you.<\/p>\n\n\n\nPension and retirement<\/h4>\n\n\n\n
Phone service<\/h4>\n\n\n\n
Commuting<\/h4>\n\n\n\n
Paid memberships<\/h4>\n\n\n\n
Automatic transfers to a business savings account<\/h4>\n\n\n\n
Internet<\/h4>\n\n\n\n
Utilities<\/h4>\n\n\n\n
Heating<\/h4>\n\n\n\n
\n\n\n\nOne-time or irregular expenses<\/h3>\n\n\n\n
Food<\/h4>\n\n\n\n
Work devices and tools<\/h4>\n\n\n\n
Company uniforms and swag<\/h4>\n\n\n\n
Team events and small extras for your employees<\/h4>\n\n\n\n
Business events<\/h4>\n\n\n\n
Courses and training<\/h4>\n\n\n\n
Advertising<\/h4>\n\n\n\n
Design a logo that makes your business stand out.<\/h4>\n<\/div>\n\n\n\n