8 Ways to Cut Business Expenses in 2021
The COVID-19 pandemic has created countless obstacles and taken a financial toll on businesses across the U.S. Many small businesses have taken the hardest hits since they have fewer resources than large corporations to fall back on. If you’re looking to slim your budget down for 2021, here’s a list of tips to help get your financials in order.
1. Reduce Spending on Office Utilities
No matter if your staff is mainly working from home or the office, you can save big by reducing your office utility costs. Install a programmable or smart thermometer to keep temperatures steady while people are in the office and to turn off once you’re closed for the day.
If your office runs hot or you work in a warm climate, invest in blackout curtains to minimize passive heat. To trap heat in your building on cold days, make sure to caulk or weatherstrip windows and door frames.
2. Focus on Free Advertising
One of the easiest ways to reduce costs is by focusing on how you can maximize free advertising. While you’ll most likely still need paid ad campaigns, increase your presence or social media. You can use your accounts to not only advertise for free but to engage your targeted audience through more targeted ads. Most audiences are active on social media, and companies often find that social media ads are more engaging to their audiences than billboards or other more traditional ads.
3. Switch to Software
Automating your administrative, accounting, and other tasks can save you time, resources, and money. They eliminate unnecessary tasks for your staff to free them up to accomplish meaningful things that can’t be done by a machine.
Accounting software, such as QuickBooks or Xero, can save you money by ensuring that you don’t need more employees to keep your books updated. There are countless other financial, administrative, marketing, and customer support tasks you can automate as well.
4. Review Your Staff Structure and Employee Roles and Responsibilities
Do you have too many managers and too few accountants? Are some staffers given too few tasks, which could be done by one person instead of two? Look closely and your staff structure to determine if there are places where fewer people could do the same number of tasks or if certain players can take on more responsibilities.
5. Establish Employee Productivity Incentives
A highly motivated staff is a highly productive staff. Build staff morale and make sure your employees feel appreciated and valued. One of the best ways to do is to provide incentives for staffers who go above and beyond. Incentives could be as simple as thanking staff publicly or through a card. You can also offer meals, extra vacation time, or other more tangible incentives to push the team to be more productive.
6. Reconsider Business Travel
Business travel can quickly drain a company’s budget. With the ongoing pandemic, it can also be dangerous or can violate local COVID-19 restrictions. Trim your employee travel and push virtual meetings over costly and potentially hazardous in-person ones.
7. Reevaluate Your Insurance Policies
Even if you’re not trying to trim your budget, businesses should reevaluate their insurance policies annually. Doing so will ensure you meet all your state’s insurance requirements but aren’t paying for coverage you don’t need.
You can start this process by researching rates from alternative providers, especially for workers’ compensation if you live in a state with a competitive state fund. You should request private insurer and state fund insurance quotes to see if you could save on insurance costs without sacrificing coverage quality.
8. Consider Outsourcing, Freelancers, and Contract Workers
Many businesses find that they need help during certain seasons for specific departments. It may be cheaper for you to hire outside help or outsource this work, especially if you know it’s not a permanent need.
Freelancers and contract workers can help pick up slack during busy seasons without hiring permanent staff that you won’t need a month or so down the line. It may also be cheaper to outsource specialized work that you need year-long, such as IT services.
Starting Fresh in 2021
No matter your business’s size, you can take a few easy steps to save money in 2021. Trim staff, business travel, and other expenses that aren’t necessities. Maximize on outsourced and outside workers before hiring more permanent staff. These simple tips can save you time and help stretch your budget and resources in the upcoming year, helping you recover from the tumultuousness of 2020.
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