8 Ways To Reduce Your Monthly Business Expenditure

Even the most successful of businesses inevitably face a cash crunch or two during their lifetime during which paying bills, giving employee wages, handling operational costs, etc become a nightmare. Here’s how to avert such adverse events through cost-cutting strategies.

We’re not talking about laying off employees or cutting corners from an already tight budget. We’re talking about practical ways like the ones below to save your business a substantial sum of money every month.

Make friends with technology

Is that document submission process taking too long? Is accounting eating into your team’s valuable time? Use technology! Many companies feel that investing in such products is a waste of money but very few realise that time is money. Using products and services saves time and minimises instances of manual error, making work smooth and thereby, giving more room to creativity.

Test before you buy

Seasoned shoppers all have one mantra; “One needs to shop around before buying.” Similarly, companies too should not jump on a product and purchase it for the entire team. Most products offer free trials or discount offers for the first month which gives your team to test it out and then purchase it. In case the tool does not offer free trials, buy it for an individual before purchasing for the entire team. Make sure to compare different products available in the market, consider their pricing, read reviews by peers, etc before making a decision.

Buy in bulk

Buying in bulk is a money-saving principle used by businesses, big and small. Be it the retail shop owner across the street or designers who bulk buy fabrics to make profits, it is always cheaper to purchase in bulk. Buy essentials like office supplies, like paper, printer cartridges, etc or products like tissues, coffee, etc. in bulk. You may be able to save thousands this way.

Track every little expense

Keep a record of all miscellaneous expenses or buy tools to track every kind of expense no matter how small or insignificant they look. Small expenses often add up and create bottlenecks when claiming taxes. The best way to track these expenses is to save all the receipts and review credit card settlements at the end of the month. There are many apps and service products that can help with this.

Review expenses every quarter

Purchased a SaaS tool last quarter? Don’t forget to stop the subscription once you no longer require it! If you forget, you will find that your business is burdened by services you never use that simply weigh down the balance sheet.

Find creative alternatives to traditional vendors

Some services are required by every business irrespective of their size. If you are looking for HR and Recruitment services don’t just rely on conventional options but explore and then select the agency or services based on your requirements.

Apply credit card rewards points for gift card purchases

Use your credit card reward points to purchase gift cards to minimise business expenses like employee gifts, office supplies or travel. You can save thousands with these points.

Renegotiate your payment terms and timelines with clients

If yours is a B2B Business and your clients ask for payment terms of 30-90 days, offer them a discount on their next purchase in exchange of timely payment. Alternatively, you could also give a discount on current invoices in return for early payment that can boost your business growth and maintain a healthy cash flow through invoice discounting platforms.

It’s Time for Drone Delivery

The other day, I was sitting with a group of college students at Starbucks, we were discussing startup businesses. They were brainstorming of what type of business to start. A guy in an ice cream truck pulled up and the driver ran into Starbucks. I joked as he ran by, “don’t you sell any coffee flavored ice cream?” Everyone laughed as did the driver as he briskly rushed the door open and ran in. “Maybe he is just using the restroom?” We all laughed again, and then saw him get pick-up his pre-made coffee he must have ordered with his smart phone Starbuck’s app.

As he was leaving he told us while we sat at the outdoor table that he did sell coffee flavored ice cream. I asked if I could buy a round of ice cream for the group. He apologized and said; “Today, I am delivering Amazon Packages, as a delivery contractor, my brother is using all his vans, so I am helping out, we are really busy – Prime Day Delivery!” Everyone was intrigued, and he broke into a stride saying; “Chow” as he left, and he turned on the music for us as he drove away. What a cool small business owner. We all laughed again, he was so busy he just needed more caffeine to finish his hectic day.

Our group then went back to brainstorming on what a smart business might be for a startup. I laughed and said: “Hey, you have to be observant, we just saw a guy in a friggin’ ice cream truck delivering online packages because they didn’t have enough vans or people to help, that means there is demand in the market not being met.” I started asking them a series of questions:

- How could you deliver more efficiently?
- How could you streamline the delivery business model?
- How could you revolutionize the package delivery business?
- How could you find other underutilized vehicles and people to deliver?

And, then I reminded them that Amazon now has a market value of $1 Trillion. I asked them about other observations they just had?

- Why can’t that ice cream man deliver Starbucks?
- Why not start a drone business to deliver Starbucks and Amazon?
- Why not figure out how to solve those delivery challenges with software, apps, drones, combination?

I reiterated; “Let’s face it, you know there is unfulfilled demand in the marketplace for new delivery companies and better options when you see an Ice Cream truck delivering online packages as an Amazon Contractor.”

I explained that you have to observe everything and think. I explained that we can’t be too busy here brainstorming that we stop observing, the clues are everywhere, right in front of our noses. If you are at a loss for ideas, look around, read the newspaper, listen to people complain, think about things that would make problems go away for people – then try to come up with solutions for these challenges – solutions that you can make a profit in providing.