As the year draws to a close, many businesses begin the process of evaluating their performance and restructuring key processes to prepare for the new year.
During this period, a key metric that all businesses have to consider is their expenditures.
With 82% of businesses failing due to miscalculations in cash flow, business owners and department heads should keep a stricter eye on their budgeting if they want to remain buoyant.
But with the dynamic nature of a business landscape, there’s a valid reason as to why startup failure falls under such a high percentage.
To help you cut costs in the coming year, we’ve created a list of ways for you to make prudent expenditure decisions. By focusing on these areas of your business, you’ll find more success in cutting down operational costs without impacting productivity.
1. Adopt New Technology
One of the easiest ways to cut down on operational expenditure is by improving the technology you use to run it.
By focusing on investing in better software like linkfacts.link you can ensure that your employees are working with best-in-class resources. It’s one of the most effective investments a team could make as inadequate technology can increase the human hours needed to complete a task.
For example, project management tools such as Trello is a free tool that centralises company tasks in one place and eliminates logistics work. It’s an easy way to be more efficient without needing to spend time getting everyone together for a meeting or checking up on progress.
Another great tool for employees to use is Slack, a team messaging application that can remove geographical and physical barriers to allow cross-collaboration with team members, no matter where they are presently located.
In essence, SaaS tools are excellent ways of ensuring that all employees can best utilize their skillset without being hampered down by repetitive tasks.
2. Outsource Non-Core Projects
One of the most effective ways to manage costs in a business is by outsourcing non-core projects. By removing tedious processes from your department, you’re able to better streamline your team’s efforts into more meaningful things and spend less time on administrative tasks.
According to Fortunly, over 300,000 jobs are outsourced outside the US each year. Businesses also have the liberty to hire only when the need to accomplish a certain task arises, which is unlike full-time positions where employee downtime may add up on costs.
For example, customer support outsourcing can easily free up a significant amount of time. Email marketing, and social media marketing are also things that can be outsourced to contract talent.
Outsourcing tasks to an agency or freelancer is also made easy with platforms such as Upwork and Fiverr – where skilled remote workers and businesses can connect and exchange services.
Overall, it’s an excellent way of saving money without the need to cut down on staff or processes.
3. Use Predictive Analytics to Forecast
Accurately projecting data is the key to saving money in your business. By evaluating past trends and patterns, you can create a dynamic projection model that can back future plans with data.
Using predictive analytics isn’t just advantageous to business owners – it has also been proven to have great benefits for employees.
For example, an accountant can accurately predict cash flow. This allows businesses to better update their books and manage finances without the need for a third-party finance manager.
It’s also capable of identifying employee expertise in certain areas, allowing them to focus on what they’re best at instead of being bogged down by repetitive tasks.
The good news? Process mining with Apromore conducts and automates data and predictive analysis. This enables your team to identify cost reductions, increase transparency, and enhance the overall user experience – which can save you millions just by adopting the right data mining technology.
4. Lower your Expenditures
Does your business pay off any subscriptions or policies that it doesn’t use anymore?
For example, do you pay excess for cloud storage that’s beyond your business’s needs right at this moment? Or insure people who no longer work for your company?
The first step to saving money is assessing how your cash is used in your business. Whether in subscriptions or insurance, it’s important that you only pay what remains useful to the growth of your company.
By identifying what’s not being used anymore in your business, you can eliminate it and clear up your finances for things that do matter. You’re also able to cut down on unnecessary expenses or interests that may prevent you from scaling your business to the next level.
5. Find Better Deals
While premium goods are locked behind a large paywall, you should look for ways to avail of cheaper rates for items that you can afford to skimp out on.
For a rising startup, you can settle for lesser-known brands of software that offer roughly the same services as their more expensive counterparts. And once you scale, then you can consider subscribing to the industry’s best.
You can also compare the prices of physical goods with other items of the same calibre. Comparing prices and taking your time to research before making a purchase can save you hundreds of dollars just by finding the most affordable deals.
While this doesn’t mean you should be full-on thrifty and sacrifice convenience, it’s a good idea to take the extra time to see how you can lower your costs without sacrificing quality.
With these tips, you’re able to easily manage your expenses and cut down on costs that can be used to further develop your business. It’s also an effective way of assessing where exactly your money is going so you can put it to better use instead.
Good luck and keep hustling!