how to cut business expenses

Tips to cut business expenses


Do you know the biggest risk in running a business? Is it the lack of capital Or the lack of sales? 

Running out of money, especially in a small and new business can emerge as the biggest risk. Let’s say there is a business that suddenly caught rapid growth. The cash flow needs to grow with the growth rate, as a business needs to hire more people, purchase assets, make other expenditures to keep up with demands. However, the business is also more likely to drain capital. Therefore, resulting in under-capitalization. There can be other scenarios too such as:

  • Not having enough investment.
  • Not having adequate team management.
  • Lack of capital sources.
  • Lack of time management.

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The ideal solution 

Where many business owners mainly focus on generating sales and revenue, another equally important solution is to lower business expenses. If you have started a new business or are at an early stage of development, it will be advisable to focus on lowering the cost of business expenses as much as possible. This method is also adequate for an already stable business. Cutting business costs not only saves you from huge bills, but it also benefits the environment and working lifestyle. So here are do-able methods that will help you to cut your business expenses.

Let’s first mention the most prominent ways to cut business expenses

Which service is the most essential and costs more than any other? An individual faces the overhead bills on electricity. Business owners especially get tired of paying huge electricity bills every month.

But saving on electricity is the easiest. Some of the methods to reduce electricity cost is:

  • Use of light blocking blinds and curtains: Always make sure the office has windows. With the help of curtains and blinds, you can adjust the lighting of the rooms. In winters with open blinds, the sunlight can make the room well lit and warm. In summers or hot areas blackout curtains to minimize passive heating. This can also increase your workforce productivity as they tend to feel more natural.
  • Coming up with strict policies: Rules like unplugging the unused electronics and closing lights when the room is not in use can be made to follow. Rewards can be provided to employees for their participation. This way unplugging will make electronics extend their lifetime and break down which will save your maintenance money. The rewards like days off will encourage workers to save your bill.
  • Energy-saving appliance: Energy-saving electronic appliances may cost more than simple ones but they save you from huge bills for a long time. 
  • Use of renewable energy: To save on electricity, adopting renewable energy sources in the office not only works in your favor but for the environment too. If you decide to install solar panels it may cost you initially but it gives a return on investments in the long run. Energy-saving and small-scale renewable energy appliances often do qualify for local, state, or federal energy efficiency tax credits.


Are you still spending a fortune on unnecessary business traveling?

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Woman Working From Home Having Group Videoconference On Laptop || Pc: geekwire



As the lockdown has introduced us to various online meeting platforms like Google Meets and Zoom, it will not be difficult to conduct meetings at the place of your comfort. Many other applications provide quality video services. This method of conducting meetings can save thousands of bucks. Many digitizing innovations that use virtual reality can be an investment for big businesses but will save greater expenses. Taking unnecessary trips majorly wastes a lot of time and time is money for any business. Hotels and plane trips aren’t cheap. You can just conduct meetings from your place and save all that money that may be utilized for better things.


The most used entity with the easiest implementation of  cost reduction

Paperwork is inevitable in business. The official work papers are used in abundance in big organizations. Just like saving energy, paper saving is a good and easy way to cut business costs. This will not only work for the companies’ bottom line but also the environment. There are multiple ways to do it.

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Pc: treehugger
  • For scratches and notes, avoid the use of fresh sheets. Reuse waste paper instead.
  • You can utilize both sides of the paper for printing and copying. You can set the system on default.
  • The printed reports’ margins can be tightened and have small fonts.
  • Inform the sources of postal mail when employees no longer work for your company.
  • You can switch to electronic file services. Use secure electronic file exchange services such as” delivered secure” which is safe for sensitive data, rather than traditional courier services.
  • Use recycled paper.
  • Unneeded paper can be sold to recycling companies.

Don’t make the mistake of buying a single entity

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Necessary office supplies like envelopes, chairs, room dividers, phone systems, and many more can be overlooked to save money. Suppliers often overpriced these small but essential supplies. So how can you cut expenses on these?

  • Try to make strong deals with your suppliers to buy in bulk. You can get these supplies at cheaper rates when bought in bulk.
  • Some orders like files, envelopes, furniture can be avoided to be bought every 2 weeks.
  • Find a permanent supplier for your office equities and ask for permanent customer discounts.
  • Or you can also explore different markets and deals for the supplies.

These efforts for small things may not bring in a lot of money. Though it will reduce expenses that will add up at the end of the month.


Switch to more affordable platforms for advertising

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Traditional advertising methods cost more than online advertising. In the era of digital marketing, a business can take advantage to lower its advertisement expense. Social media platforms are the cheapest way to promote your business to a large audience without spending a large amount of money on advertisements.


Four days of work is better than six days.

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How much have you heard that an employee after finishing off his/her work sits idle for the rest of the day because they have no choice? Even if a worker finishes off with the work before time and stays in working hours, it all still costs money.

A business with a workforce that can be as productive from anywhere, should be allowed to work from home. In general, a four-day workweek in most sectors can get as much work done while cutting down costs. This will not only save you a lot of utilities but will also boost worker’s morale.

If you think this method will reduce the company’s productivity, then you might be wrong. With fewer people in a place means less use of energy and supplies. This eventually leads to reduced bills. Also, any conflict among workers becomes improbable. Thus, enhancing a healthy atmosphere between workers. This will ultimately result in the company’s overall growth.


Respect your time and strategize to get the most out of it.

In business, Wasted time is wasted money. If your business needs the employee at the workplace then make sure they make full use of their time. How can you optimize productivity from the employee?

  • You can provide a work encouraging environment.                                          
  • Entice your employees to work hard by bringing up competitions like the employee of the month and bonus for being regular. Providing rewards for every achievement. Also, keep a friendly environment at the same time. A motivated employee is ready to give their best. Hence, increasing your profits and cutting down costs.
  • Rules like no mobile phones at work to block out distractions can also be helpful.


The non-core work might not need your regular workforce

Why should you hire freelancers and independent contractors for the outside business activities engagement (main revenue source)?

  • They are easier to hire 
  • Their employment is cheaper than traditional ones if you can execute the freelance contract.
  • You don’t have to:  provide them with health insurance benefits, pre-tax retirement accounts, any kind of leave, or other high price benefits.
  • You can pay them when the project is complete.

But it’s also important to note that, 

  • They are probable of being less loyal
  • They work on other projects too
  • They might work on advance payment which keeps your projects at risk.

Despite that, for one-time projects and growing non-core activities, they can serve as the secret ingredient that keeps your company’s labor costs under control.


A significant  way is to figure out the ideal place to settle your business

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Pc: construction week India

Economies tend to be different in different places. Some cities might be the ideal place to start and grow a business and some might be terrible for the same.

You can relocate your business to a lower-cost region. This is one of the best ways if you are looking to reduce high location costs. Though sometimes it is hard to find such places near your home territory.  

If relocation isn’t an option, you need to understand your location costs and adjust the numbers according to your pocket.

  • Commercial Rent: if you have taken space on lease for your business, you need to look for a longer period. The rental market increases daily. Try to negotiate a lower rental rate on a longer-term lease. 
  • Taxes: make yourself aware of local and state tax deductions.
  • Labor Costs: In a labor-intensive business like running a hotel, labor is a major cost consideration. Local minimum wage and overtime regulations should be your concern at a place you own that business. For example, the local minimum wage is $20 per hour, but the prevailing hourly wage at a comparable hotel is $22, you might need to set your hotel’s labor hourly wage at the latter mark. 



Business owners aim to make profits. The profit on your business total expense is many times neglected. If a business owner practices to cut business expenses, it not only helps in lowering the bills but also provides other societal benefits.