5 ways you can optimize your business costs to save money
In business, the main goal is to maximize profits. And in 2020, you have to save money to make money.
Due to the current economic situation where the demand for certain products and services has been hit hard, business owners have to shift their focus significantly. So, if you run a business, this is the time when you have to pay special attention to how you can optimize your business costs.
Optimizing business costs can actually mean getting more for less.
The most important thing you have to consider is where you are spending the most money and how you can target resources that can give you the best return.
For example, let's say that you run a small steak restaurant that has its own specialty sauce that you make yourself every day. But what if you could outsource the production of the sauce to a third party?
Of course, outsourcing will cost you something. But in the end, you'll have less on your plate and more time to focus on the more essential parts of your business, like serving more customers and making more sales.
In addition, if you as a restaurant owner serve your clients’ tables yourself, it'll help to provide a more authentic vibe and a home-like feeling that people look for and come back for. So, that’s two wins for you.
What if you lack ideas or inspiration on how to optimize your business costs? Then continue to read this article where you'll find ideas on how your business can save money.
1: Take your business online
Taking your business online should be one of the first things to consider if you want to save money. You can do it partly or fully – it depends on which of your services can be transferred online.
Why move your business online?
Because an online business or store will help you to avoid some of the costs that usually are associated with a physical storefront. For one, “renting” an online space is way cheaper than renting a storefront in the city.
For instance, the Mozello Premium Plus plan lets you make an online store for an unlimited number of items with unlimited storage and all payment gateways for €12 per month. So, why would you pay hundreds of euros for rent if you can build an online store instead?
(Here's a tutorial on how you can build an online store with Mozello.)
Second, if you, for example, have a physical store that sells apparel, you'd need to tie up your money to stock up merchandise.
Imagine that your company sells t-shirts in 3 different colors: white, black, and yellow. In a physical store, you would have to have all the color options in stock so that people who come into your store can buy whichever color t-shirts they want. But what if no one buys the yellow ones? Then you're forced to discount them and as a result – miss out on potential earnings.
On the other hand, if you're selling your t-shirts online, you wouldn't need to stock up your merchandise, as it would be available on demand.
2: Be mobile
This tip should be taken literally. For one, being mobile means being available to wider audiences. Secondly, from the cost optimization perspective, it means significantly lower costs on things like rent, furnishing, and even staff – businesses on the wheels usually require fewer employees.
Let's say you're running a restaurant and you want to save some money. Instead of paying rent for premises, invest in buying a trailer that you can equip with all the necessary tools that you need to take your restaurant business to any place in your city or maybe even country.
To run such a business, you don't need much furniture, expensive kitchen equipment, tableware, waiters, etc. At the end of the day, cutting all these expenses allows you to save big.
Take an example from Crepes Cafe. They have a cafe in Jurmala (a resort town in Latvia) and, in addition to that permanent location, they travel around the country with a trailer to sell their delicious crepes. While they usually visit all the big food festivals in the country, they also offer to go to any event on demand.
Source: Crepes Cafe
This idea works also for those businesses that are not related to the food industry. For example, if you are selling any merchandise, you, too, can hop in a trailer, bus, or car and travel around the country to sell your goods at festivals, fairs, and more.
Just remember to announce your store's “tour” dates and destinations to inform your customers about your whereabouts to avoid being left empty-handed.
3: Try outsourcing
When you run your business there are certain tasks that you rather not handle – and that is perfectly normal. Thankfully, there is a way you can avoid doing something that you don't enjoy – outsourcing.
Thanks to technology, this process has never been easier. For example, you run a business but you're not a big fan of bookkeeping. No problem. You can hire a bookkeeper from a variety of freelancer networks that are out there.
Here are some of the most popular global freelancer networks that you can use:
Another benefit of outsourcing is that you'll have more time on your hands to focus on generating income. Therefore, don't be afraid to acknowledge what you don't prefer doing and just outsource it.
4: Learn something new
What if you don't want to outsource any tasks? Or what if you can only afford to hire a freelance bookkeeper for your business and no other specialist? In that case, you'll have to learn to master the skills you need on your own.
Let's say that you have created an online store and you need to write a compelling copy for it. If you have never done this yourself and don't feel confident about your writing skills, it's time to conquer the fear. And to do that, all you need to have is a computer, wifi, and a will to learn.
Head to ''Mother Google'' and search “how to write a website copy” and choose whichever tutorial format you prefer – infographic, video, or step-by-step guide. You can also check out our blog post on this topic that’s filled with tips on how to write a website copy that works.
If you want to invest some funds in your self-training, you can see the possibilities offered by Skillshare – an online learning community that has hundreds of video classes on various topics taught by eminent teachers. This will cost you $99 or €90 a year.
Mozello customer – ecommerce shop OWA – is a great example of how you don't always need to hire professionals to help you out with your business. With some patience and willingness to learn, you can learn any skills you need to grow your business. The founders of OWA, for example, studied the Mozello blog when creating their online store, and here's the result.
5: Save on resources
Think about the resources that you're using to run your business. Most likely, the first things that come into your mind are electricity, paper, and plastic.
The truth is that in most cases you cannot fully avoid the use of the previously mentioned resources. However, you can still think of strategies that can help you to reduce the consumption of them. Not only will this decision help you to save some money, but it will also help the planet.
Making your business planet-friendly and sustainable can become a HUGE selling point, as more and more shoppers try to make conscious choices when it comes to spending their money on goods.
Here are a few other ideas on how you can reduce resource consumption in your company:
- Turn off electrical devices – research shows that one unplugged electric device can cost you up to 165 U.S. dollars (about €151) each year. Now go around your office and count how many plugged in electrical devices you have in there and multiply the final count with the previously mentioned 165 dollars. Shocking, right?
- Choose laptops instead of desktop computers – laptops consume less energy, as they don't have to be connected to a power supply 24/7.
- Reduce paper use – think about all the processes you can move online or perform via an app. For example, instead of issuing paper invoices choose electronic ones. Here you can find a list of the best e-invoicing software that you can use for your business.
- Use refillable water bottles – the constant use of plastic bottles and cups is expensive, not to mention that it's very cruel towards nature as plastic pollution is one of today's greatest environmental problems. Therefore, instead of buying countless amounts of plastic, encourage your team to use refillable water bottles or cups.
Besides saving on resources, you can also save on online tools and services you don't use. Make an audit to see what tools you've subscribed for and pay for every month, yet haven't actively used for a long time.
Think, tools and services like:
- Professional SEO tools
- Social media management tools
- Cloud storage tools
- Paid project management apps
Can you think of digital tools you don't use but continue spending money on them? Cancel the subscriptions now.
Now that you've become acquainted with our 5 ideas of how your business can save money, it's time to try out our theories in practice!
Keep in mind that your possibilities to save money are endless as long as you're motivated to find ways on how to earn more by spending less.
What are your strategies to optimize costs in your company? Don't be shy and share them in comments!
Learn more about Mozello – the world's easiest to use website builder – here.