Starting a business is exciting, but keeping it afloat can be a challenge. Three years ago, when I started my business, my mentor told me that starting a business was not a big achievement.
Why, exactly?
His answer shocked me. Apparently, most businesses shut down within just one year. This ratio keeps growing and reaches 90% once it gets to five years. This means that once your business turns five, only then is it time to celebrate.
But why do businesses fail?
A study by the University of Georgia shows that it is all about cash. Businesses run out of cash or find it hard to manage their finances properly, and so, they suffer. As a business owner, you might want to know if there is a suitable way to cut operational costs. Well, fortunately, some tried and tested ways can help in cost-cutting.
Therefore, if you are a business owner trying to make sure your business stays afloat, then these cost-cutting techniques can help.
Automate Everything
Automation has singlehandedly changed the way we conduct business. In fact, in the last few years, most of the businesses have switched to partial or complete automation.
But why?
Well, there are multiple reasons, including cutting costs, reducing risk, boosting productivity, and improving efficiency.
When companies move toward automation, their main goal is to reduce the human risk factor. This eventually helps with cost-cutting and reducing the headcount. The best thing about automating business in this digital era is that it is now accessible and affordable for all.
In fact, small automation tools require a very minimal subscription fee, just a smart device and a decent internet connection, like Spectrum. This ISP is well-reputed, mainly because it offers a variety of affordable plans, seamless connectivity, and multilingual customer support, including a dedicated Spectrum Servicio al Cliente for its Hispanic customers. It works as an ideal pick for startups with very limited funds.
Offer Remote Work
Remote working is one of the best, most effective, yet simplest ways to reduce the overall business cost.
How?
Well, a large part of business operations goes to rent, appliances, power, and basic technology. Now, imagine telling your employees to work from home. This will instantly help you bring this cost to zero.
Additionally, a remote working facility helps employees minimize the commute time and promotes overall productivity. Since people are staying home, they can enjoy a better work-life balance, which also helps with employee satisfaction and employee retention.
Utilize Free Software
Who doesn’t like free things? I know I do.
Most people think that in this world, if you want to run a business, nothing comes for free. However, you might be shocked to know that most tech companies love to offer freebies. From Canva to Slack, nearly all the tools used for business today work on a freemium model.
So, if you want to reduce the operational cost of your business, it is better to switch to free tools rather than spending funds on paid tools. Once you scale or require advanced features, you can switch to the paid option.
Hire Freelancers
Hiring freelancers is one of the simplest yet most effective ways of cutting costs. However, most companies do not realize this. In fact, most of the businesses discourage freelancers and part-timers. As startup owners, it is much better in terms of skillset as well as cost.
How?
Imagine you want an experienced resource, but your budget is limited. In that case, most businesses cut costs and opt for a less-skilled resource. Eventually, the risk of hiring fresh resources, training, and risk factors adds up, and this eventually leads to serious consequences.
On the contrary, if you hire part-time or freelance resources with suitable experience, it will cost you less, and the risk factor will be low.
Eventually, the results will be much favorable, and you will still be getting the best work at a very limited fee.
Work With BYOD Policies
Within a company, devices and tech are considered an asset or an investment. However, in reality, it is a liability. You will continue to spend money on its maintenance, and by the end of it, the device will keep losing value.
Moreover, once it reaches the end of its life, you will be required to replace the device. On the contrary, Bring Your Own Device (BYOD) culture helps in empowering the employees, as well as helps the company to reduce costs.
This policy is ideal for remote workers and freelancers, since all these things collectively help in ensuring that the employee feels comfortable.
Simply put, running a business does not have to be expensive if you navigate through operations properly. The above-mentioned simple tips will help you reduce the overall cost of running the business and eventually help you become profitable.