7 out of 10 business owners go out of business within a decade of opening their doors. That’s a pretty harrowing number to take into account for a budding entrepreneur that’s looking to take the world by storm.
If there’s one piece of advice that we can offer you that can help you to avoid that fate, let it be this… Don’t spend more money than you’re making in your company.
Sounds pretty rudimentary but you’d be shocked by the number of people that end up investing way more in expenses than their company could ever generate in sales.
If your expenses are too high, make the back half of 2019 a time where you’re going to start prioritizing cost saving initiatives. Here are a few places to start with this that we think you’ll find helpful.
1. Shop for Cheaper Supplies
Your office likely does business with a variety of supply vendors.
Some people come in to bring you paper. Others come through once a week to refill your snack bar.
It’s paramount that you make sure that you’re not overspending on these suppliers. Believe it or not, they can single-handedly bankrupt businesses.
To start cutting back, first determine which suppliers you can cut out altogether. Snack bars, for example, shouldn’t be a company necessity.
Next, for instrumental suppliers, see if you can save on them. Do this by asking them to bring down their rates or by shopping around for a separate supplier.
2. Watch Maintenance Expenses
Whether you have a lot of computers on-site that get regular maintenance or you have commercial washers that need washer machine repair, you’re going to want to assess how much maintenance teams are charging and see where you can save.
As we suggested with our last point, a solid way to trim maintenance expenses is by talking to your contractor to see if they can offer you better prices. Many will bite on your ask if you’re willing to opt into longer service agreements.
In other cases, you may want to assess if you need a maintenance contractor at all. You may be able to self-manage your on-site equipment or call on a one-off contractor as issues arise that’s cheaper than having an agency on retainer.
3. Outsource Work
Not every job needs to be done in-house. As a matter of fact, a large number of tasks that your company performs can be managed by external teams, many of which work abroad.
Because of cost of living differences that are present between first-world and third-world economies, many western countries can get administrative work and other remedial tasks done for pennies on the dollar internationally rather than paying someone a salary in-house to complete these tasks.
There are outsourcing consultants that can look over your processes and make recommendations on where you can export labor. Bring one on to see what they have to say.
4. Transition to Low-Cost Marketing
One of our favorite cost-saving initiatives that you can take on is to cut back on marketing spending. After all, marketing is one of the biggest money sucks that most medium to large sized companies have on their books.
Today, you can get in front of highly targeted audiences online for pennies on the dollar via Google and Facebook ads. Start learning about what your digital marketing options are and jump on the bandwagon rather than overpaying for ad space through legacy mediums (TV, newspapers, etc.)
5. Limit Meetings
Meetings cost money. Plain and simple.
Every hour that you’re paying employees to sit in a room to be wallflowers while people share basic information is money lost.
Make sure that every meeting that gets called in your business is a meeting that is of paramount importance. Then, make sure that people that are on your meeting invite are there because they absolutely need to be.
6. Transition Into Off-Site Work
Tools like Slack have made it so large teams can communicate digitally. Given how advanced these tools have become, face to face interaction is decreasing in office buildings which is giving many business owners the kick they need to make their teams digital.
To start working solely over the internet, experiment by making a certain day of the week an online day. If you’re noticing that productivity does not drop off, try adding more days on until you eventually get a good idea of where breaking points might exist.
If your team works the same online as they do in person, ditch your office lease and have fun working in the cloud.
7. Get Everyone Involved in Sales
Your sales team’s success is what makes and breaks companies. To boost that success without hiring on more sales reps, have all of your team members pull double duty in sales.
If somebody in marketing is having a slow week, have them hop on the phones to start making cold calls. The same should be true of secretaries and everybody else in your employ.
The more people that are trying to push your products, the more products you’re going to sell.
Closing Out Our Cost Saving Initiatives Suggestions
Whether it’s via expanding your team’s roles or it’s via negotiating with contractors, there are a number of cost saving initiatives out there that can reduce your business expenses in 2019. Hopefully, our suggestions above have given you some ideas as to where you can get started.
For more inspiration, check out additional business-focused content on our blog now!