January 07, 2020
Author: Ben Halverson
Organization: Lorman Education Service
Businesses have one primary goal: to increase profits. Sure, you want to provide great service and products, but you can't do that if you aren't making enough money to keep the lights on.
When it comes to profitability, much of the focus goes into marketing and sales (rightfully so). However, cutting back on costs can also help businesses save money – and ultimately increase profits.
Here are 10 cost-saving ideas for businesses in 2020.
- Take Advantage of Technology
Technology can save time and money by streamlining and optimizing tasks. The right tools can help employees stay focused and productive.
- Virtual meetings and group chats. Minimizing physical meetings and phone calls allows employees to stay focused and improves productivity. Productivity losses cost U.S. businesses $1.8 trillion annually, according to the Samanage State of Workplace Survey. In many cases, virtual meetings are just as effective as physical. Group chats can clear up issues without having to interrupt the entire team's day.
- Online collaboration. Cloud-based collaboration tools allow team members to work together on projects without having to be in the same room – or country. Many of these tools can also be used to organize and centralize company documents.
- Scheduling and digital time clocks. Reduce administrative costs by taking advantage of digital scheduling and time clock solutions.
- Optimize Energy Usage
Commercial buildings account for 20% of the U.S.'s energy consumption, but as much as 30% of that energy is wasted, according to researchers at MIT.
Optimizing energy use can help save businesses money while reducing their environmental impact. Here's how:
- Turn off all lights and computers before leaving the office.
- Shop for Energy Star certified equipment.
- Consider using power strips and turning them off at the end of the day.
- Take Advantage of Tax Deductions
It may sound like a no-brainer, but many businesses fail to take advantage of all available tax deductions. From business vehicle usage to contractor fees and utilities, businesses have many tax write-offs at their disposal.
Work with an experienced tax professional to ensure that you're taking every relevant deduction.
- Ditch Paper
According to Square 9, companies with 100 employees and 60 filing cabinets spend more than $60,000 per year in paper management. Going paperless can potentially save your business a significant amount of money.
There are several ways to ditch paper:
- Switch to digital invoicing and online payment systems
- Digitize files, forms and checklists
- Take advantage of cloud storage
- Trim Costs Starting with Monthly and Annual Services
Take an honest look at your company's monthly and annual service plans. Do they align with your usage?
Maybe you're spending a fortune on mobile data overages. Switching to an unlimited plan may reduce your monthly fees. On the other hand, your current mobile plan may be more than your business really needs. This rule can be applied to many essential services, like cloud storage, bookkeeping and even legal services.
Trim costs where necessary or upgrade to a more suitable plan to save money over the long-term.
- Encourage Employees to Telecommute
Telecommuting has the potential to save businesses $700 billion a year, according to Global Workplace Analytics.
When employees work from home, businesses save on utilities, absenteeism and lost productivity.
- Buy Used Equipment
Equipment can be a costly investment, but purchasing lightly-used items can reduce this financial burden.
Common second-hand purchases include:
- Office equipment
- Smartphones, laptops, desktops and tablets
- Leverage Low-Cost Marketing Strategies
Marketing is essential to your success, but traditional advertising can be costly. The average cost of a prime-time TV commercial was $24.76 per 1,000 impressions in 2014, according to Ad Age.
Focusing on low-cost marketing strategies, like social media advertising and word-of-mouth marketing, can stretch your marketing budget further. Paid social media advertisements, according to Ad Espresso, cost just $7.19 per 1,000 impressions in 2016.
- Shop Around for Services
Start shopping around for essential services to reduce your monthly or annual costs. Comparison shopping can save businesses money on:
- Insurance policies
- Banking or credit union fees
- Internet or cable fees
Some banks and credit unions will even offer free money promotions and waive maintenance fees simply by switching to their institution.
- Outsource Strategically
Outsourcing can save money over the long-term. Hiring in-house can be costly, and in some cases, unnecessary.
For example, if your business is developing a new website, hiring a full-time developer may not be the most cost-effective solution. Using an independent contractor for non-core projects will save you money in terms of payroll taxes, unemployment insurance, workers' compensation, health insurance, sick days and vacation time.
For many businesses, it makes sense to outsource non-core tasks to independent contractors or agencies. Accounting and bookkeeping, for example, are two vital aspects of any business, but because they are non-core tasks, they can be outsourced to experienced professionals. The company saves money by eliminating the need to hire new employees. Time can be spent on core operations.
Training and continued education can also be outsourced. That's where we come in. At Lorman, we provide online courses, webinars and seminars for businesses and professionals. Contact us today to learn more about our courses.