3 Easy Ways to Cut Costs and Keep Your Business Lean

"When in doubt, simplify." ― Eric Ries, The Lean Startup. Small businesses are always pushing to drive profits and increase sales, but few fledgling firms truly know the ins and outs of cutting costs to maximize profits. Here are three ways you can effectively cut costs for your small business while keeping operations running smoothly.

1. Switch to Free

Why pay when you don’t have to? Here are some normally costly practices that have free counterparts:

• Move your IT to the Cloud. Many cloud apps are easily scalable, streamlined, and effective, so turn to Google docs, Microsoft Office Live Workspace, Amazon Cloud Drive, Onedrive, and DropBox to help you shed some paperweights.

• Build and maintain a free site. Don’t spend thousands of dollars paying a web designer to develop your site. Apps like Strikingly offer free website creation and management tools. Your site needs to mature alongside your business: a simple landing page can transform into a multi-faceted online store, blog, and consumer hub as you grow. 

• Project manage like a boss. Wrike is an online tool that makes it easy to implement lean product management. Real-time updates for remote teams, interactive Gantt Chart project timelines, and unique email-friendliness are only a few ways it can help you breeze through daily tasks and manage your business processes.

• Use intern power. Recruiting young pre-professionals can easily increase efficiencies in the office without padding the salary books. You will be promoting a culture of lifelong learning by recruiting eager minds ready to put in effort and gain experience for lower compensation. 

2. Practice The Art of the Discount

You never know what discounts you can get until you ask! It’s astounding how many companies are willing to gift a substantial promotion in order to keep your business. Here are some discounts to pursue:

• Renegotiate your lease. Even if it’s a long-term lease, your best bet is trying to renegotiate. A short-term rent reduction may be just what you need to hold over until sales perk back up again. Just beware of trading short-term relief for a longer commitment.

• To bulk, or not to bulk? Buying in bulk may not save you as much money as you think. While paying month-to-month may make little sense when there are heavy discounts for paying annually, a shipment of 1,000 ballpoint pens can easily dry up before you use them all. Consider carefully whether buying in bulk fits your business’s trajectory.

• Check your insurance price. Shopping around for insurance policies can be really beneficial, especially during renewals. Look for an unbiased, independent agent to help you find the best rate for your specific needs.

3. Eliminate Redundancy

Unnecessary expenses are everywhere. A magnifying glass, some wine, and a late night with the ol’ balance book can prune superfluous monthly charges (just not too much wine). Look out for extraneous subscriptions, interest from late loan payments, as well as credit card processing and membership fees. Here are a few ways you can trim the excess:

• Use less paper. Did you know that 40% of office paper is discarded within 24 hours of printing? Cloud storage will allow you to save on copy paper (and stop killing so many trees). 

• Eliminate discretionary spending. Stick to essential expenses only. Sure, there will always be  marketing opportunities that can be dealt with more leniency, but try and keep your checkbook closed to things like new break room upholstery. 

• Track inventory closely. More money tied up in long-term assets means less money in the bank. Make sure you’re spending only what you need to on inventory.

• Shut down power-hungry appliances. Use energy-efficient light bulbs and office appliances with the Energy Star label. Not only will you save on your electricity bill, you’ll be eligible for green energy tax credits. If you still want to save power, you can always request a free energy audit from your power company.

Help Your Business Succeed

Cutting out paper, asking for discounts, and using free online work tools are all effective strategies for saving money and gaining a significant head start on your competition. Cutting your costs doesn’t happen overnight though, so remember to breathe and believe in your success. Nothing happens without putting yourself out there, so I’ll let Eric close us out:

“Reading is good, action is better.” 

― Eric Ries, The Lean Startup

Author Bio:

Andrew Mao is on the Growth Team at Strikingly, a Y-Combinator alum and pioneering site building tool for startups and go-getters.Building your site with Strikingly is a considerable head start compared to campaigns that try to build their sites without it. Instead of spending $15,000 or more to develop your own site, go ahead and start a free site with Strikingly.