Do you cringe when you hear the words “cut costs”? Do you have more money going out than you have coming into your business? If so, it may be time to consider money-saving measures to rejuvenate your bottom line.
If you’re unsure where to start, thirteen entrepreneurs share their recommended cost-cutting tips to help you gain control of your finances and work smarter from the ground up.
1. Understand “need” vs. “want”.
“In my experience, most people don’t have a clear line between what is needed and what is wanted. By truly drawing and sticking to that line, you realize a lot of things “companies need” are actually things that “companies want because other companies have [them].” Then you add things as your company actually needs them and not before.”
– Brennan White, CEO of Watchtower, @bpw
2. Ask for pricing incentives.
“Most people never actually ask for a discount or ask the person they are buying from if they could do better on the price. Asking for discounts allows the seller to come up with the price, which usually is lower than you would have asked. If they do come back with a less than stellar offer, then you can ask for a specific price.”
– Brandt Page, Founder and CEO of Launch Leads, @brandtpage
3. Don’t waste money of fancy office space.
“Having an office can be isolating, and it is also an overhead expense that is not necessary in today’s society. There are many ‘pop-up’ offices and public spaces (i.e. coffee shops, coworking spaces) that are now set up for the new generation of [remote] entrepreneurs and business professionals. Besides being nearly cost-free, these spaces foster growth, creativity, and communication.
– Audra Clemons, President of Audra Clemons Media Services, @thatclementine
4. Create business systems.
“The best way to save money is to systematize! Not only will this save your business money, but it will also make every process of your business easier. Everything can be systematized, from your company’s hiring process to how each customer call is handled.”
– Courtney Smith, Vice-President of Lakeside Group Associates, @LakesideGroup
5. Build a talented in-house team.
“With the right mix of talent on your team, you can handle those expensive operations and activities in-house. Our expert company website which was projected to cost us between $2,000-$10,000 came free because we had the team [design and develop it]. A balanced and competent team is essential.”
– Daquan Oliver, CEO of Jossle, @josslegear
6. Outsource tedious daily tasks.
“Most entrepreneurs think everything is done faster and better with their own two hands. But in the long run, most will expend far more resources and money doing these lower level tasks themselves instead of freeing up that time for high-level tasks by outsourcing the more tedious ones.”
7. Invest in quality instead of quantity.
“My grandfather used to say, ‘We are not rich enough to buy cheap things.’ He meant that cheap things break faster and end up needing to be replaced over and over. You might be spending less money when you first buy the product, but you usually end up spending much more money in the long run than if you had bought a more high-quality item in the first place. T0 save money, invest in quality items for your small business.”
– Vladimir Gendelman, Founder and CEO of Company Folders, @vgendelman
8. Automate business processes.
“Find ways to automate as many repeated manual processes as possible. In finance, it’s common to value a product based on the net present value of future profits. In the case of costs, you can calculate the net present value of time-consuming tasks. If the up-front cost of automating a process is less than the costs of maintaining the status quo, then invest the resources to automate it.”
– Benjamin Sann, Founder and CEO of BestParking.com, @BestParkingCom
9. Stay in control of your finances.
“Sign the checks! That’s the best tip I can give to someone trying to save money. When you sign each check, you know where your money is going and you know how much you’re spending. This allows you to think creatively about ways to find cost savings opportunities.”
– Joe Miller, Co-Founder and COO of HourlyNerd, @joe_dmiller
10. Ask yourself three questions.
“First, [ask yourself] do I need it, or do I want it? If it’s merely a want, then stop. Next, can I afford it? If yes, then proceed. Finally, is it worth the cost? To answer this question, create a mental list of why it is beneficial and why it is worth the cost to see if your investment is worthwhile.
– Joshua Weiss, CEO of TeliApp Corporation, @teliapp
11. Closely monitor marketing costs.
“Identify marketing efforts that are bleeding your pocketbook by using fail proof methods to track response and conversions. Do this by using unique phone numbers, website landing pages, and email addresses for every single TV, radio, print, newsletter, and pay-per-click campaign you run. Don’t make the mistake of sending all of your leads to one phone number and then expecting them to remember how they found you.”
– Jonathan Prichard, President and CEO of Mattress Insider, LLC., @InsiderMattress
12. Avoid Over-staffing.
“Don’t hire an employee until you absolutely have to. Far too many startups hire to fill positions that aren’t absolutely necessary. I’ve made this mistake before, and it costed me tens of thousands of dollars – far more than any of my other expenses.”
– Chris Kilbourn, Owner and CEO of TOFU Marketing, @TOFUmarketing
13. Learn accounting basics.
“Learning to keep up with the finances not only saves you money on a part-time bookkeeper, but it keeps the finances where they should be: front and center. Learning to do your own books keeps your finger on the pulse of the business. Being on top of the finances also means your CPA cost is a fraction of what most businesses will pay.”
– Nick Francis, Co-Founder and CEO of Help Scout, @nickfrancis