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- Reduce your tax burden
Move some of your business offshore to take advantage of zero corporation tax. Does it seem difficult? It really isn’t when you know how. You could start this journey today. See how.
- Use a Programmable or Smart Thermostat
Heating and air conditioning aren’t negotiable expenses. Even small changes in your facility’s ambient temperature can adversely impact your customers’ comfort and employees’ productivity, threatening your top and bottom lines. But that doesn’t mean you can’t do everything in your power to save money on air conditioning.
- Use Passive Energy-Saving Measures
Complement your programmable or smart thermostat with passive energy-saving measures that reduce your climate control and lighting systems’ workloads and carbon footprints.
- Power Down Non-essential Lights and Equipment After Hours
This is a painfully straightforward way to reduce your company’s electricity bill without affecting its operations. And once you and your team get in the habit of following through, it’s painfully easy too.
In a white-collar office, personal computer workstations comprise the single biggest nonessential energy suck, so make sure everyone powers theirs down before heading out. Shut off overhead and desk lights too, or leave instructions for building cleaning crews to do so when they’re done.
- Reduce Paper Use
Like reducing energy and water usage, cutting down paper waste is good for your company’s bottom line and the environment. And there are myriad ways to do it, including:
Print and copy double-sided by default
Use secure electronic file exchange services.
Reuse waste paper for scratch or notes
Tighten margins and shrink fonts on printed reports
- Align Plan Costs With Usage
Your company probably pays for a lot of essential services – telecommunications, cloud storage, bookkeeping, perhaps even legal support – via monthly or annual plans. At minimum, you should review these plans once per year to determine whether they’re adequate for your needs.
- Encourage Telecommuting
For millions of employers, telecommuting has tremendous cost-cutting potential. Unfortunately, that potential remains largely untapped, until of course COVID19 and now everyone, wherever possible is doing it. Work from home now.
According to Global Workplace Analytics, 50% of the U.S. workforce holds a “telework-compatible job” and 80% to 90% of workers want to be able to telecommute at least some of the time – but only 20% to 25% telecommute at all. Still, the trend is unmistakable: Among non-self-employed workers, the share of workers who telecommute rose 103% between 2005 and 2014.
- Use Space More Efficiently
Offices have been getting more efficient for years now. According to CCIM, the average new office lease (as of late 2012) had just 185 square feet of dedicated office space per worker. That’s down more than 20% from the beginning of the century. And the trend may accelerate: In a survey cited by CCIM, U.S. executives revealed plans to shrink their footprints to less than 100 square feet of dedicated office space per worker by 2018.
Moving your business digital and having remote workers who can conference call in gives them flexibility and saves you cost. See how you can facilitate this, right now.
- Make Sensible Healthcare Changes
Most employee benefits packages include some form of healthcare coverage. Salaried employees expect employers to provide for their healthcare needs, and it’s probably the right thing to do anyway. Unfortunately, it’s also getting more expensive each year.
Pro tip: If you’re thinking about adding a health savings account (HSA) look into Lively. It’s simple, transparent and you can get signed up in just five minutes.
- Use High-Tech Alternatives to Legacy Systems
Look around your facility. How many legacy technologies do you see? That’s likely to depend on what your company does, as is your ability to address the problem.
In the Financial compliance industry, the drag from legacy digital systems isn’t always as clear-cut, but that doesn’t mean it’s not real. For instance, even if you still use it to send documents to old-fashioned vendors or state agencies, you can probably do away with your fax machine. Ditto for your landline phone service – a cloud-based phone system is far, far cheaper – especially if you are calling international.
- Buy (Gently) Used
Nowhere in your company bylaws does it say that you must buy only shiny new equipment. So why not buy gently used items when it makes sense to do so?
Depending on what your company does, your used buys might include:
- Office technology, such as printers and copiers
- Personal technology, such as refurbished smartphones, tablets, and laptops
- Vehicles, such as company cars
- Storage equipment
- Pay Invoices Early
Many vendors offer small but meaningful discounts to clients that pay invoices ahead of schedule. For instance, it’s common for vendors to knock 2% off the invoice total when clients pay in full within 10 days, instead of the usual 30 days – an arrangement that’s typically represented as “2/10 net 30.”
- Barter or Make In-Kind Exchanges
Thousands of years ago, the global economy (such as it was) depended on bartering. Today, most transactions use a currency backed by central banks, but that doesn’t mean non-monetary exchange is completely obsolete. The digital revolution has given rise to a committed cottage industry of barter facilitators such as Business Barter Unlimited and U-Exchange Business. There are limits to what (and how much) you can barter, but it’s worth looking into these arrangements if cash is extremely tight or you think your products or services make valuable trades.
- Leverage Social Media Advertising and create a networked opportunity.
Paid social media advertising is cheap. For instance, according to Ad Espresso, the average U.S. Facebook ad’s CPM cost was $7.19 in the third quarter of 2016 – less than a third the cost of a prime-time TV ad. Social media ads are also less costly to produce – though it’s increasingly common to see slick video spots on your Facebook or Twitter feed, the most cost-effective social ads remain simple, dirt-cheap memes.
And you don’t have to pay for social media advertising at all. If you devote time and personnel to engaging your company’s fans and building your social following organically, you can reach thousands of current or prospective customers without spending a dime.
By creating a network of businesses that pool resources, you benefit from economies of scale and together your cost to market comes down.
- Encourage Word-of-Mouth Marketing
Organic social media conversation is but one form of word-of-mouth marketing, a cost-effective and potentially powerful form of outreach that essentially outsources part of your marketing department to your customers.
Word-of-mouth marketing comes in many different flavors: referral programs that pay existing customers to refer new customers, college brand ambassador programs that pay young people to evangelize about their employers’ products on campus, social sharing communities on Pinterest and other digital media, and online review directories, such as Yelp. Your company’s ideal word-of-mouth marketing strategy or strategies will depend on its audience’s demographic makeup, buying habits, and response to messaging and sales efforts.
- Disincentivize Procrastination and Encourage Effective Time Management
Time is money. That means wasted time is wasted money. Every minute you and your team spend procrastinating is a minute that’s not being spent on value-producing work.
Procrastination can be as innocuous as stopping by a coworker’s desk for a brief, non-work-related chat, or as problematic as ducking out of the office for hours at a time to run personal errands. If chronic procrastination is a problem at your office, figure out why it’s happening and take appropriate steps to address it – for example, by breaking overwhelming tasks into chunks.
- Use Freelancers and Contract Labor for Non-core Work
Freelancers and independent contractors are easier to hire and cheaper to keep employed than traditional employees, provided you have an enforceable freelance contract to set expectations and mitigate risk on both sides of the relationship. You aren’t expected to provide freelancers with health insurance benefits, pre-tax retirement accounts, family leave or paid time off, or other pricey benefits. You just need to pay them for completed work.
It’s important not to over-rely on freelancers and contractors, as they’re likely to be less loyal and may have other relationships that distract from their work for your company. But for one-off projects and ongoing, non-core activities, they can serve as the secret sauce that keeps your company’s labor costs under control.
- Invest in Your Employees and Long-Term Contractors
It costs more than you think to hire an employee, especially one with in-demand skills or specialized knowledge. According to the Center for American Progress, replacing a typical employee (not executives or physicians) costs about 20% of the employee’s annual salary. Other studies suggest that this estimate is conservative. Even if you take 20% at face value, that’s a lot of money – for an employee earning $75,000 per year, you’re looking at $15,000 in recruitment and onboarding costs.
With this in mind, it makes sense to do everything in your power to retain talented employees, even if it requires you to spend a bit more on salaries and benefits. If it keeps a high-potential worker in the fold for an extra year, upping that $75,000 salary to $85,000 is a bargain.
- Avoid Leverage and Interest Charges Wherever Possible
Judicious use of small business credit cards notwithstanding, debt is generally your enemy. Before embracing small business financing options that put you in hock to big banks or venture capitalists, tap your personal finances and friends-and-family networks for interest-free startup capital. Every dollar of interest that you pay is a dollar that won’t accrue to your bottom line.
- Understand and Control Your Location Costs
Not all economies are created equal. Some cities and states are wonderful places to start and grow a business. Others aren’t so nice.
Collectively, location costs play a decisive role in sorting the former from the latter. The best way to reduce high location costs is to relocate to a lower-cost region, but that’s not always practical or even possible, especially if you’re an independent professional with deep family roots in your current backyard.
If moving isn’t an option, consider operating more digitally. Much of a compliance business is online nowadays,
- Pool Resources With Other Small Businesses
When it comes to buying supplies, inventory, and equipment, there’s strength in numbers. Many businesses reduce recurring costs by pooling resources with other small businesses in their trade, or with like-minded companies across wider geographies. You can literally do this today. See how.
- Remember That Everything Is Negotiable
Unless it’s clearly spelled out in a binding contract, every listed price is negotiable. This is the case even if you don’t leverage a small business alliance or network such as American Express OPEN. Entrepreneurs tend to look out for each other, and simply mentioning that you own a business is often enough to get a discount.
In some cases, there’s an active quid pro quo at work – often referral or bulk discounts. For instance, when outfitting your new commercial suite or home office, ask the interior decorator if they offer discounts or bonuses for new client referrals. Likewise, if you’re buying 10 or 20 desks or laptops at once, you’ll likely qualify for a volume discount – but you have to ask.
- Only Buy in Bulk When It Makes Sense
It sounds counter-intuitive to advise against buying in bulk. However, anyone who’s made the mistake of purchasing the biggest tub of peanut butter at the warehouse club, only to throw it away two years later without making so much as a dent, has firsthand experience with the pitfalls of bulk buying.
Before committing to a bulk purchase, ask yourself a simple question: Does it make sense to buy this much of one thing? If your office goes through a ton of coffee each month, buy a 50-pound bag of whole beans. On the other hand, if you’ve dramatically cut your paper usage in recent years, maybe it doesn’t make sense to buy hundreds of reams at a time to get a slightly better per-unit rate – especially if you don’t have a ready place to store it all. Everything in moderation.
- Evaluate Employee Perks and Fringe Benefits on the Merits
In many industries, notably software, competition for talent is fierce. On top of juicy (and often unwise) equity packages and generous time-off allowances, many tech employers offer fabulous perks and fringe benefits in a constant arms race to attract ultra-qualified engineers and designers.
With a requirement to go digital with your work and conduct more and more tasks online, it makes sense to have back up if you don’t employ IT talent.
- Shop Around for Essential Services
Most business service providers operate in competitive industries. Use that to your advantage by shopping around for essential services – or simply threatening to shop around at the right time.
Many insurance companies offer hefty discounts or bonuses to customers who make the leap from competitors. Ditto for credit unions and banks, which use the promise of free bank accounts and bank account promotions to drive new business. Cutting out that $10 to $15 monthly maintenance fee, and then bagging $200 to $300 in free money simply for opening a new account, sounds like a pretty good deal.
Every business is different. For example, you can’t limit travel expenses if your duties don’t require you to travel, and you can’t downsize your office space if you’re working out of a home office.
Still, it’s virtually certain that your business ledgers contain at least some financial fat to trim. Even if you think you’ve plucked all the low-hanging fruit, it may be worth your while to take another look. It won’t cost you anything and it could produce a significant payoff in time.