Start-ups and small businesses often operate on tight margins. As a result, they are always looking for ways to grow their revenue in order to sustain a healthy profit. To do this, they can either increase their revenue or reduce their expenses. The latter is the best option to improve profitability for small businesses, so here are four ways to reduce operational costs.
Embrace technology
Automating business functions is one of the most effective ways to improve efficiency and reduce the payroll burden. Therefore, look at your current administrative processes and identify areas that can be automated using technology. For example, instead of hiring a team of accountants, get accounting and invoicing software. Also, switch from paper documents and embrace technology like Google Drive to help you file and store documents.
Embrace digital marketing
Marketing and advertising are vital to the success of your business. Instead of breaking the bank on traditional forms of advertising, leverage the power of the internet to your advantage. Online marketing methods such as social media marketing and CPC advertising allow you to reach millions of potential customers at a fraction of the price.
Consider outsourcing
Outsourcing secondary business functions will help you replace fixed costs with variable costs. Although your business requires the services of a lawyer, accountant, administrative staff, IT personnel, etc., you don’t need to have dedicated departments for operations to run smoothly. Outsourcing these services only when you need them will help you cut down on unnecessary labour costs and allow you to work with highly qualified personnel that you could otherwise not afford.
Opt for shared workspaces
Commercial leases will bind you in lengthy and expensive lease terms. Since most start-ups only need a limited number of workers when beginning, there is no need to waste a large share of your capital renting and furnishing a big office space. So, if you don’t have an office yet, opt for a shared workspace. Most co-working spaces come fully furnished and offer short-term lease contracts that can be upgraded when you get more employees.
Reduce operational costs – find out more
Tower Leasing offers expert advice and various business finance products to help you manage and grow your business. For more information on our services, read about our business finance options or contact us today.
