8 Simple Cost Reduction Techniques for Growing Businesses

Your Simplified Guide to Business-Wide Cost Reduction

In any business, you have several different costs slowly cutting away your bottom line. Direct (wages), indirect (accounting and legal expenses), and operating costs (production) are just a few of the necessary expenses needed to run any business. But as the demands on businesses continue to grow, you’re probably looking at ways to do the seemingly impossible: successfully performing cost reduction while increasing organizational efficiency.

*Yikes. *

But, no matter how large or small your company is, you should always look at how you can reduce unnecessary expenses. From altering workplace culture to onboarding new technologies, there are plenty of ways to successfully carry out cost reduction.

And if you want the budget to remain competitive, you need to know the best ways to remove expenses in a way that empowers (not limits) your growing company.

Follow these 8 easy steps to reduce your expenses and increase productivity today.

1. Evaluate Business Expenses

Most businesses pay for services they don’t use. Businesses often waste money on tools, vehicles, applications, services, and even excessive fees.

The "why" is less important than the solution. But with people going in and out of growing organizations, expenses often get overlooked. Or, they were justified at times when they were needed. Still, businesses grow and change over time. And that means your cost reduction needs to evolve with your business as well.

The solution: evaluate your expenses. Chart how much your business is paying towards products, services, vendors, and other tools or resources. Compare those expenses to the return they provide. Take a look at whether or not they're absolutely needed for your business to function.

After that, cut the dead weight. You'll be surprised at how quickly those expenses add up, increasing your bottom line.

Without unused products, services, and equipment bogging down your business, you can redirect resources to where they’re needed. Expand services. Train staff. Optimize workflows. With more money to spend on growing your organization, you can increase organizational efficiency quickly.

Still, it's important to note that this form of cost reduction can get out of hand. While it's good to remove unneeded expenses, a lot of growing businesses fixate on this method of cost reduction.

As a result, they put too much emphasis on squeezing out pennies from expense budgets when they could be getting times and dollars from cost reduction by other methods.

2. Hire Remote Contractors and Freelancers

More people work remotely than ever before. Taking advantage of that trend can be a very effective cost reduction strategy for your business.

To begin with, you’ll save money on not having to either rent out an office space or pay for a coworking office. Studies show that you can save $10,000 per employee per year on office rent alone. Additionally, you don’t need to provide benefits to contractors either because freelancers and contractors are often self-employed.

Studies also show that remote workers are happier in their jobs and as a result, more effective. Plus, a remote staff means fewer sick days and higher productivity levels.

That's because contractors and freelancers don't work the same types of hours or have the same obligations that employees have. They work on their schedule, producing results for your business at a discount of what it costs to employ a regular, full-time staff.

*It’s a win-win for everyone. *

3. Increase Workplace Transparency

Data siloes can ruin your business. You could lose valuable data and make lasting mistakes that put your business at unnecessary risk without a complete view of your growing organization.

The more siloes, the more blind spots. And the more blind spots, the more likely it is for waste, rampant maverick spending, fraud, and theft to occur in your business.

By integrating systems and applications in your organization, you’ll make it harder to hide waste. That's because you'll have a much better, clearer view of your growing organization and where your budget goes.

One other benefit of increased transparency is that you gain a better understanding of your organization and how to better serve your customers. And this can lead to increased revenue and opportunities for your company.

4. Go Green (Look for Renewable Alternatives)

If you do have an office space, look for green options to cut costs. Energy-efficient appliances, lights on timers, smart thermometers, and treated windows can help cut down on energy costs.

Another great way to go green at work is to speak with your staff about optimizing their energy use. This can help lower your company’s carbon footprint while inspiring a workplace culture around cost reduction.

*Believe it or not, employees notice energy inefficiencies. *

Standing out as a company that cares about more than the bottom line will help inspire your employees to care more about the work they do for your growing business. In turn, they’ll be more invested (and more productive) in your company.

5. Take Advantage of Vendor Discounts

Many organizations miss out on opportunities to reduce costs through strategic procurement. But this area of your business is a strategic component for effective cost reduction.

The key to successfully reducing expenses is knowing how to leverage your procurement process. For example, when you’re on top of your invoices, you can negotiate with vendors, giving you more leverage. You can also save on bulk purchases and receive discounts by paying invoices early.

Staying on top of your invoices also means that your vendors will prioritize you. If your business pays invoices early, use that to your advantage. Leverage vendor relationships to get more priority shipments and enhanced services. This ensures you'll have enough products in stock and that your business is ready to handle increasing demands.

While leveraging your procurement process is a great cost reduction method, you'll need to have a streamlined system in place for this to work. Luckily, there are procurement tools you can lean on to make that happen. In short, they help you improve procurement through integrations and automations.

But with a better picture of your supply chain, you may even be able to leverage the market to reduce costs and give your business a much-needed competitive edge.

6. Invest in Efficient Applications

More and more these days, there’s a technical solution for the problems in your business. Rather than hiring more people to cover increasing demands, you can save on costs by finding software that optimizes workflows and delivers on business demands.

Again, you can see a great example by analyzing the procurement process. Manually processing invoices can cost between $12 - $40 per invoice. The quickest way to reduce costs in your business is to move from manually processing invoices to automating the process. (That only costs around $3.50 to process...an incredible difference.)

Automation makes things {easier and more efficient](/8-warning-signs-that-you-need-to-automate-your-business/) for all parties as well. With fewer menial tasks, your employees will have more time to focus on high-level issues facing your business.

Keep in mind that automation alone won’t fully cut costs in your business. You’ll need to work with your employees to establish a positive work culture after automation shifts their tasks.

In other words, they’ll need to know that the bar is still high and they’ll have to work hard to deliver on customer demands. But with both automation and a new employee mindset working together, you quickly see cost reduction across your organization.

7. Use Low-Code to Streamline Your Business Workflows

Every day brings new applications, systems, and features that could grow your business. And companies looking to drastically reduce costs across their organization need to automate and integrate their systems while giving the customer MORE.

Traditionally, that meant either hiring developers or outsourcing software development. With low-code, that has all changed.

Low-code provides an easily approachable solution to reduce inefficiencies while reducing costs in businesses of any size. In short, low-code platforms make it easy for anyone to quickly drag and drop new applications into existence. All without extensive coding, testing, or building of back-end infrastructure.

As a result, you can build the apps you need and connect them to your existing systems at a fraction of the cost of traditional, custom app builds. By doing this, you'll be able to scale your systems to support your growing business without burning through your budget on IT resources.

8. Reduce Costs with Tech Consultants!

While low-code can significantly reduce costs in your organization, it’s not always easy to onboard the platform. On the surface, low-code is approachable. And it can be put to use in your company, quickly. But knowing what systems to integrate, what apps to build, and in what order to do it requires experience if you're going to effectively cut costs with new systems.

That's where trained tech consultants can offer your growing business unparalleled support. Quandary Consulting Group leverages the power of Quick Base and Workato to help organizations build cost-cutting, low-code solutions for their business. From procurement to custom builds, our staff pulls from a range of industry experience to create the most cost-effective plan for streamlining your business.

With a 100% approval rate, our results speak for themselves. For more information on how you can rapidly reduce costs with strategic low-code solutions, Contact us today.

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