In a rising interest rate environment, now is a good time for small businesses to think about cutting costs and boosting savings. Some cost-cutting strategies are quick and easy, like getting rid of unnecessary expenses or scaling back free lunches, but others represent more long-term options that can make your business leaner, more profitable and more successful.
Most universities have internship programs that require students to get both paid and unpaid work experience before graduation. Take advantage of these fresh minds willing to learn and work for credit.
Cut back on meeting time
Oftentimes staff or even team meetings are a waste of time, taking twice as long as they should and still not accomplishing anything. Limit the amount of employees in any given meeting and try to communicate by email or phone instead. Rather than sitting in meetings, your employees will be out getting new business and actually working.
Go to the cloud
According to the Better Business Bureau, cloud computing is becoming the new normal for small businesses because it reduces IT costs. Cloud-based solutions are a more affordable alternative to safely host your data, and cloud-based software like Salesforce is priced per user, starting at just $25 a month.
Reconnect with core customers
If you really know your customers, then you’ll know what they want and don’t want. This knowledge can save you valuable time and money in terms of marketing, advertising and budgeting. The money you spend to engage and retain them will be focused toward earning a profit.
Rethink traditional advertising
The old days of expensive print and television advertising are behind us. Today’s small businesses advertise online and use SEO and social media to reach customers. Public relations, in the form of news media and interviews, is also a great source of free advertising that can boost business.
Employee costs make up a big part of any business’s budget, so using independent contractors or outside consultants for some jobs can save money. Having less people in the office could also result in a smaller workspace or the option to share space with another company.
Just because a business agreement started out one way doesn’t mean it has to stay that way. If a vendor values your business, then he may be willing to renegotiate on price and terms. It can’t hurt to ask.
Another creative way to save on employee costs is by allowing some staff to go virtual. Maybe someone has a long commute, needs a more flexible schedule or you just want to move to a smaller office space to save on rent. Converting at least some of your staff to telecommuters could cut back on operating costs and actually increase efficiency.
Trade for goods and services
It might be an old-fashioned idea, but bartering for work without an exchange of cash is a way to get you the goods or services you need during lean times. Partnering with another company to swap services may also result in an important business relationship going forward.
Review all expenses
This last one is a no-brainer, but taking some time to go over all business expenses to see what’s necessary and what’s not could result in significant savings. Eliminate anything you don’t really need and question expenses that aren’t providing a return.
MidSouth Bank offers many services, from checking and savings accounts to direct deposit and business loans, to help grow your small business. Learn more.