6 Effective Ways to Reduce Spending in Your Business

“Keep your revenue high and your expenses low”

Sometimes that phrase can feel a bit like a fairytale because making money does cost money, but there are ways to reduce your costs and your expenses.

I’m a big fan of budgeting and looking for ways to spend less money than I have to. You say frugal, I say cost-effective. Either word is absolutely fine, as long as it's good for your business, which encompasses you, your employees, and your clients/customers. 

Now talking about it and doing it are two separate things, but here are 6 effective ways that you can reduce the spending in your business:

Analyse your spending

It's important to take a close look at your spending habits and determine where you can cut back. What you’ll be looking for are any unnecessary costs and from there, you can make changes accordingly.

Outsource

Outsourcing certain tasks can be a great way to reduce costs. Consider hiring freelancers or remote employees to help with projects, as this can help you avoid the overhead associated with employees. A few things you can outsource in your business are your social media/content creation, email marketing, bookkeeping/accounting, and that’s just to name a few.

Negotiate with vendors

Don't be afraid to negotiate with vendors and suppliers. Chances are they are willing to work with you on pricing to ensure your business remains successful. Another way to do this is by doing an exchange in goods/services, this is another way for you and your vendors to bring value to each other’s businesses and support one another.

Invest in technology

Technology can help you automate tasks, reduce overhead, and cut costs. Investing in the right tools and software can help you run your business more efficiently. When looking at investing in software for your business, look for programs and software that do multiple tasks or have the ability to do a few key tasks.

For example, Canva is a great place for content creation, combining similar Photoshop and Premiere Pro capabilities, while also being able to schedule content. So you can create and edit photos and videos, then schedule them to be posted on your socials all in one place.

Another great way to automate your business is with Xero. Create invoices with details from other apps. Xero’s software helps you automate tracking payments and invoices, sending an email for new invoices and payments, and your accounting.

The key to adding technology to your business is to ensure you’re maximising your ROI, which means using one software to do a multitude of tasks for you, rather than a bunch of software that each does just one simple task.

Reduce energy consumption

Take steps to reduce energy consumption in your business. Invest in energy-efficient lighting and equipment, and use natural light whenever possible. The less you use, the less you spend, so not only is it better environmentally but it’s better for you financially. A win-win situation.

These are just a few ways you can reduce your business expenses. If anything, your first step should be analysing your spending, so you’ll be able to see where your money is going, and how frequently. From there, you can incorporate the other 5 tips.

Have a question about your expenses and spending? Why not “Ask a Bookkeeper”?

Book an Ask a Bookkeeper Clarity Session with me!