5 Effective Ways to Cut Expenses for Your Business

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Let’s face it: running a business costs money. Whether you have a multinational company or a small local business, managing expenses and monitoring costs is a key component of running a business. Here are five effective ways to help reduce your business expenses:

1. Equipment

Don’t compromise quality for costs. Buying a cheaper product doesn’t mean it’ll be the best choice in the long term. Maintenance, repairs, utility costs… these are all factors to consider when deciding on new equipment for your business. After accounting for all these factors, that cheaper piece of equipment may not be so cost effective after all. Thinking of renting? Purchase items such as printers instead of renting them; tax benefits such as depreciation and not having to worry about ongoing costs will cut your business expenses long term.

2. Outsource

Hiring external people might seem risky, but this can be a great way to reduce business expenses. For example, a freelancer will often end up cheaper than an internal staff member, as you simply stop paying them once their tasks are complete. Hiring interns can also be a cost-effective solution. Another expense-cutting idea is to offer your staff the option to work from home at least one day a week. This might seem a bit strange, but it will save on electricity and water costs that do add up.

3. Business Travel

To travel or not? This is an excellent question when cutting business expenses. Evaluate the expectations of your trip to see if there is a more cost-effective substitute. Do you really need to meet overseas or will a quick Skype call do the job? Even local trips, such as a 20-minute drive to catch up with a client, might be unnecessary if a phone call would suffice. If travel is necessary, contact a professional business travel consultant, such as FCM Travel, as they will have a wide range of cost-effective services and solutions suited for all travel purposes. Before you plan that next business trip, explore all your options and you may find a more cost-effective way to achieve the same results.


4. Utilities

Paying too much for your utilities? Research your current utility company and compare with others; there could be a better deal out there. Always paying late fees? Check with your current provider whether they have an early or on-time discount. Ever thought about “going green”? From energy efficient light bulbs to water efficient taps, there are many ways to help reduce the cost of your business utilities.

5. Negotiation

Negotiation is key! From suppliers to credit cards, negotiating a better deal can assist in cutting your business expenses. Tired of those high-interest credit cards? Negotiate a lower APR (annual percentage rate) with your bank to reduce your long-term expenses. Don’t forget to pay your bills in full and on time to stop paying late fees to further cut down expenses.

Large or small, your business will incur expenses in its daily operations. If you monitor your expenses, you are sure to find ways to reduce costs in the short and long term. Feel free to share any tips or tricks that cut your business expenses in the comments below.

Cutting costs image courtesy of patpitchaya at FreeDigitalPhotos.net – Travel image courtesy of khunaspix at FreeDigitalPhotos.net

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