“Offense wins games, defense wins championships” – Paul “Bear” Bryant

Look, if you’re a business owner, you already know it’s important to hustle hard and make sales happen. It’s the lifeblood of your business. 

If you’re not generating revenue every day, week, month, and year I got news for you… You don’t have a business, you have a hobby. 

Here’s the deal though. Offense is only one part of the solution. You’ve got to have a great defense if you want to win in the game of business and life. 

What does that look like? 

That means watching – and optimizing with ruthless efficiency – your expenses.

Too many business owners make good revenue, but never get to keep any of it because their profit has dwindled due to poor expense management. 

Today that ends. 

In this article you’re going to learn every strategy we know to optimize your costs so you can increase your bottom line and actually take home a little (or A LOT of) coin along the way.

Let’s get started. 

Audit Your Utilities

Did you know you can actually shop around for your utilities? Furthermore, are you 100% sure you’re actually getting a good deal with your utilities? 

There are dozens of calculations utility companies use to factor your amount owed, and often we see utility companies incorrectly calculating costs for a wide range of business types. 

We estimate over 95% of ALL businesses have one invoice with a significant billing error due to improper utility calculation.

And these errors can result in extra cash you’re entitled to, along with monthly savings on your utility bills. 

Whether it’s water, gas, sewer, or power, you have a right to choose a vendor best suited to your needs and budget. 

Reduce Your Energy Usage With A Smart Thermostat 

Unless your facility is running 24/7, you don’t need to heat or cool your business after-hours. We know A/C is non-negotiable to help provide a quality experience for your clients and employees. 

Nobody would want to work in a building during summer (especially if you’re in the south) without A/C. 

If you’re a 9 to 5 type office then programming your HVAC to slow down during off hours is fairly easy. 

What if your business is a little more complex than this? Well, that’s where a smart thermostat system will come into play. Granted, it might be a bit pricey to put into place, but if it’s saving you 10-20% on your heating and cooling bills per month then you’ll see a positive ROI quickly.

Look Into Passive Energy Initiatives

If you know anything about real estate, energy efficiency is a hot topic right now, and for good reason. Here are a couple ideas:

• LED Lighting – if your building is using incandescent bulbs still then it’s time to switch to a new bulb for your workplace. LED might not look the best, and will certainly give your office an industrial style flair, but it’s super energy efficient. 
• Light Blocking Curtains or Blinds – block out the sun in different sections of your office or building to help make it easier for the A/C to cool the unit during warm days. 
• Double Pane Windows – these window types are significantly easier to insulate your office compared to single pane windows. They last for a number of years and greatly improve energy efficiency.

These are just a couple of ideas you can implement to make your office more passive energy friendly and reduce total energy cost. 

Waste Audit

Almost every business we come across will have a recycling or waste expense, which is usually tied up into a contract with a waste management firm.

These costs quickly add up if your business has multiple locations, and worse off for business owners, waste removal has been one of the fastest rising costs for business owners in the past 10 years. 

Waste removal companies charge hidden fees as a way of padding their profitability, and these fees often go unnoticed by a majority of business owners we work with. These fees can range from:

• Fuel
• Overages
• Franchise
• Environmental
• Yardage
• Container
• Recycle Recovery
• Delivery
• And so much more…

If you feel you’re unclear about your waste management bill, it’s time to perform an audit to validate if these programs are right for your business. 

Go Paperless

It’s time to go paperless for your business. It’s a waste pure and simple to both your bottom line and the environment.

Here are a couple quick benefits to why going paperless is good for your business: 

• No more mail – yea, no more sorting through stacks of useless mail or bills. Just get it via email or through an online account. 
• Reduced clutter – prevent disorganization and chaos within your office.
• Quick access – never ask “when do I need to pay this invoice?” again. 
• Easy knowledge transfer – sharing is caring, especially when it comes to key employees needing to know important information to keep the business running. 
• Get paid faster – switching to electronic invoices will help you get paid faster reducing your accounts receivables. 

Allow Remote Work

If you run a business that’s primarily online, it’s time to consider remote work. This will significantly save your business from the cost of renting or leasing a location, and it passes the costs of office management onto the employees. 

Plus, this allows you to expand your ability to hire talented individuals from a wide variety of geographic areas, including overseas. 

Invest in expanding your business and training your remote employees instead of paying for office space, your bottom line will thank you. 

Negotiate With Your Suppliers & Landlord

Every 6 months to a year you should be negotiating with your suppliers – including your landlord if you’re renting – for better deals. 

At the end of the day, you get nothing unless you ask for it. So, it’s time to start asking. Here are a couple ideas to negotiate:

• Price check – shop around for the different items you purchase, and get quotes to keep everyone honest.
• Bulk pricing – get a better price per unit by purchasing in bulk.
• Consolidate vendors – if you’re able to go from multiple different vendors down to a handful who can all perform the same services needed, then you’re better off because you can negotiate bulk deals. 

Speaking about renting, if your lease is up for renewal it’s time to negotiate hard. Many landlords will give you a better deal if you ask for it with conviction. If they won’t budge on price, work to get extras like the passive energy initiatives or a smart HVAC system we mentioned earlier. 

Make Employees Bring Their Own Device

Many people already own very good computers. Why not allow them to bring it for work instead of paying for new ones for them?

Granted, if you’re dealing with highly classified material then this might not be for you, but for everyone else, it’s a good way to reduce technology costs. 

Instead of investing into expensive equipment – where you’ll have to constantly replace and repair the technology – just provide a stipend for employees to use their personal devices. 

Many internet first organizations do this regularly.

Use Freelancers

The world has rapidly changed in the past 15 years. Many talented people are available on an hourly or project basis from across the globe. 

Plus, these employees don’t require the same benefits as full time employees, which means a significant reduction in benefits costs. 

Audit Your Telecom Systems

In today’s interconnected world, telecommunications play a vital role in the day-to-day operations of businesses. 

However, the costs associated with telecom services can quickly add up and impact a company’s bottom line. 

Conducting a thorough audit of your business’s telecom expenses is a smart and strategic move that can lead to significant cost reductions. Here are a couple reasons why:

• Identify Cost Optimization Opportunities: An audit provides an opportunity to examine your telecom expenses in detail, allowing you to identify areas of inefficiency and potential cost optimization.
• Uncover Billing Errors and Overcharges: Telecom bills can be complex, and errors or overcharges often go unnoticed. Conducting an audit allows you to scrutinize your bills and identify any discrepancies.
• Negotiate Better Contracts and Rates: Armed with the information gathered during the audit, you’ll be in a stronger position to negotiate with your telecom service providers. By understanding your usage patterns, contractual terms, and competitive market rates, you can leverage this knowledge to secure more favorable pricing, terms, or service-level agreements. Negotiating better contracts and rates can lead to immediate cost reductions and long-term savings on your telecom expenses.
• Optimize Service Plans and Features: Telecom service plans often include a variety of features that may not be fully utilized by your business. An audit enables you to assess your actual usage patterns and identify whether you’re paying for services that go unused or underutilized. By optimizing your service plans, removing unnecessary features, or exploring more cost-effective alternatives, you can align your telecom expenses with your business’s needs, resulting in substantial cost savings.
• Explore Alternative Telecom Providers: During the audit, you may discover that there are alternative telecom providers offering comparable services at lower costs. 

Watch Your Subscriptions

Subscriptions can eat your business alive from the inside out. Employees will often subscribe to a subscription and forget about it for months on end which quickly drives down the efficiency of your operating costs. 

Every month it’s important to review your subscriptions and ask yourself, “Do we really need this? Is this productive for the business? What’s the ROI on this subscription?”

Leverage Automation

Most of the activity you do is “busy work” and can be automated away with a good workflow automation. 

Tools like Zapier and other automation companies provide you with the ability to automatically run workflows which reduce your busy work significantly. 

Allowing you to focus on needle moving activities. 

Purchase Gently Used Products

You’re not required to purchase brand new equipment for your business. Candidly, a lot of businesses purchase equipment and barely use it which means the hardware and equipment is still good for reuse. 

Products you can purchase re-used include:

• Phones and laptops 
• Vehicles
• Furniture
• Printers and copiers
• Desks
• And so much more

Staying frugal allows your money – aka your “freedom fighters” – to do more work for you. 

Audit Your Merchant Processor

In today’s digital business world, accepting electronic payments is essential, but hefty fees from merchant processors can eat into your profits. Conducting an audit of your merchant processor is vital for cutting costs and optimizing payment processing. Here’s why it’s crucial:

• Uncover Hidden Fees: Audit to identify sneaky charges and unnecessary costs. Negotiate fairer fee structures or switch to transparent providers.
• Assess Pricing and Terms: Evaluate if you’re paying more than necessary. Spot unfavorable contract terms and seek better deals based on your transaction volume and type.
• Improve Service Quality: Review reliability, responsiveness, and customer support. Switch to providers offering better service at competitive rates.
• Negotiate for Savings: Leverage audit insights to negotiate lower rates, reduced fees, or improved contract terms.
• Stay Ahead: Stay informed about market trends, new technologies, and pricing models to optimize efficiency and seize cost-saving opportunities.

By auditing your merchant processor, you’ll cut costs, increase efficiency, and pave the way for financial success. It’s time to take control and boost your bottom line.

Go Guerrilla… For Your Marketing

When it comes to cutting operating costs, businesses often overlook the immense potential of guerrilla marketing. 

Unlike traditional marketing methods that can be expensive, guerrilla marketing offers a creative and cost-effective approach to promote your business. 

Here’s why incorporating guerrilla marketing tactics can help your business significantly reduce operating costs:

• High impact, low budget: Unconventional tactics make a big splash without draining your wallet.
• Targeted and engaging: Forge connections with specific audiences, avoiding wasted efforts and expenses.
• Ignite word-of-mouth: Create excitement that spreads like wildfire, eliminating the need for expensive ads.
• Unleash the digital dynamo: Amplify your campaigns online, reaching a wider audience without breaking the bank.
• Fuel efficiency with creativity: Innovate in packaging, design, and experiences to stand out and win loyalty.

Pool Resources For Group Buying Power

If you’re ever curious how large corporations can get significant discounts on products and services, it’s because they have so much negotiating power to throw around. 

As a small business owner, you don’t have that same power, but you can if you pool together with other like-minded small business owners to create a group buying function. 

Buying groups help businesses by pooling together resources and negotiating better pricing and terms for their members. This can be done in many different ways, and the most common terms for this are buying groups, trade associations, and cooperatives. 

Either way, it allows you to leverage more ability to negotiate with a wide variety of suppliers. 

Audit Your Taxes

It’s time to take a closer look at your taxes. Auditing your tax processes and strategies can be a game-changer when it comes to cutting costs. Buckle up and discover why a tax audit is your secret weapon for cost reduction:

• Unearth Hidden Savings: Taxes can be a complex maze, but buried within are hidden opportunities for savings. An audit shines a spotlight on potential deductions, exemptions, and credits that may have slipped through the cracks. Uncover these gems and watch your tax burden shrink, putting more money back into your business.
• Identify Errors and Overpayments: Mistakes happen, and the price tag can be hefty. By auditing your taxes, you can identify errors, omissions, or overpayments that may have gone unnoticed. Reclaim what’s rightfully yours and rectify any inaccuracies, boosting your bottom line and keeping your hard-earned cash where it belongs.
• Optimize Tax Strategies: Are you leveraging the best tax strategies for your business? An audit allows you to assess your current approach and explore new avenues for optimization. Stay updated on ever-changing tax laws, uncover legal loopholes, and fine-tune your strategies to minimize liabilities. With an optimized tax plan, you’ll maximize savings and propel your business forward.
• Stay Compliant and Avoid Penalties: Tax compliance is crucial, but navigating the intricate web of rules and regulations can be daunting. An audit ensures that your business remains on the right side of the law, reducing the risk of penalties and fines.

Final Thoughts

In the game of business, it’s not enough to just make money, you have to keep it. 

This is why we said it’s critical for you to relentlessly focus on optimizing your expenses across the wide range of cost categories your business deals with. 

Hopefully these ideas get the creative juices flowing to think of your own innovative ideas for reducing costs. 

If you need more help, or want a professional to run an audit for your business give us a call. We’ve helped hundreds of businesses effectively audit their operating costs and save a lot of money along the way. 

Frequently Asked Questions

Where Should I Start When Looking To Cut Costs?

Start by analyzing your business’s financial records and identifying areas where expenses can be trimmed. Review your operational processes, vendor contracts, inventory management, and overhead costs. This assessment will help you pinpoint areas with the most potential for cost savings.

How Can Energy And Utility Costs Be Reduced?

Energy and utility costs can be reduced by implementing energy-saving practices such as using energy-efficient lighting, optimizing temperature settings, investing in insulation, and adopting energy management systems. Conducting an energy audit can identify areas for improvement.

Why Is Cost-Cutting Important For Small Business Owners?

Cost-cutting is vital for small business owners to improve financial stability, increase cash flow, and enhance overall profitability. By reducing unnecessary expenses, businesses can allocate resources more effectively, invest in growth opportunities, and withstand economic challenges.