Small business owners are used to doing a lot with a little, but sometimes cost-cutting becomes the highest priority, especially during times of crisis.
If you already run a tight ship, you may need to look for new or creative ideas to reduce costs while keeping your business running smoothly. Cost-cutting for your small business means making sure that each dollar you spend brings value back into your company. You'll want to do the obvious, like use your utilities efficiently, but here are four other cost-cutting ideas to consider.
1. Weed out unused subscriptions
In this era of proliferating digital tools and media platforms, you may be paying for regular access to things you don't use. Gather a list of every recurring payment you make and decide which ones bring sufficient value to your business.
Maybe you signed up for a free trial that you forgot to cancel. Perhaps you no longer need that software-as-a-service offering or the premium membership on a social media platform.
"I often discover that I bought a plug-in three years ago and have been paying to renew it every year, but I don't really use it anymore," says Teresa Mears, CEO of Living on the Cheap. "Go back as much as a year and see what you pay for regularly. Are you really using them all?"
Your business certainly needs digital tools and services to function well, so it's worth looking at whether the ones you're paying for are still right for you, advises Mears. Are you using all the features on the software you pay for? Might a simpler, cheaper version be just as good?
Conversely, look at whether a new tool or upgrade can make your work more efficient and help you better turn your time into profit. If new features would provide value that exceeds their cost, then adding them to your monthly bills can actually cut costs overall.
3. Renovate your advertising
If advertising is eating into your budget, consider whether you can reach your audience in cheaper ways. Social media is the obvious place to put your energy: You can buy inexpensive ads or leverage the platforms in useful ways for free. A little creativity and attitude on Facebook or Twitter may provide more attention-getting value than a hefty spend on TV or print advertising.
Look at whether your ad spending is targeting people for the right reasons, advises Brandon Renfro, a financial planner and professor at East Texas Baptist University. In the midst of the coronavirus pandemic, for example, advertising isn't about getting new people in the door so much as staying current in existing customers' minds.
"Your business isn't down because people don't know about you," Renfro says. "It's because people aren't getting out and spending money."
One idea to get people thinking about you is to partner with other businesses to expand your reach and provide added value to your audience. An example is a dog groomer and a dog trainer teaming up for a free webinar about dog care, which both companies can push out on social platforms.
4. Negotiate, negotiate, negotiate
As a small business, you are probably a valued customer to a variety of other businesses, from your suppliers to your utility companies. A straightforward way to cut costs is to ask for a reduction in your rates, even temporarily.
Companies with which you have ongoing relationships may see a long-term benefit to helping you out with a discount in the short term. That's especially true in an economic downturn when helping other businesses stay viable is for the long-term benefit of the entire economy.
"Everybody wants to help everybody out right now," says Claudette Dahlberg, owner of Dahlberg Bookkeeping and Consulting. "A lot of business owners realize that if they don't help each other, they aren't going to survive."
Even in times of economic abundance, cost-cutting for small businesses is an ongoing project. An efficient business owner should always look for ways to trim the budget.
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