10 Ways to Reduce Operational Costs in your Business – Businesses have to keep their operational costs down in order to be successful, especially if they’re companies that are looking to grow and make it big in their respective industries.
If you’re an entrepreneur or CEO who wants to do just that, these 10 ways to reduce operational costs will help keep your company running smoothly without breaking the bank. So read on and learn how to reduce operational costs in your business today!
1) Start with Paper Reduction
Paper is a big expense for many businesses, and reducing it can have big payoffs. Some ideas:
1) Use e-mail more.
2) Go paperless with bills (consider online bill paying).
3) Buy toner/copier supplies on sale or when you’re about to run out.
4) Print double-sided.
5) Cut down on envelopes by moving away from hand-addressed mail.
6) Switch to digital storage devices like thumb drives and external hard drives—they’re easier on both your budget and our environment.
7) Use less printer ink; we all know toner save mode doesn’t actually save much toner!
8) Use reusable forms instead of preprinted forms whenever possible.
9) Scan old files instead of storing them on paper.
10) Get rid of unnecessary files all together—you might be surprised how much space they take up!
2) Update security systems
Reviewing and updating your security systems can help you manage risks while you cut costs. You’ll want a plan that involves both physical security measures and some sort of personnel training or monitoring.
It’s also a good idea to make sure all of your employees understand how important information security is for the company.
The last thing you need is for one slip-up by one employee to end up costing you thousands of dollars, if not more.
At a minimum, make sure you have an updated firewall system and antivirus software running on all of your computers, then come up with an infosec policy document outlining what constitutes acceptable use—meaning what is allowed and what isn’t—and educate everyone on it.
3) Buy used office furniture
Buying used office furniture is a great way to save money. Think about it: would you rather spend a couple of thousand dollars on a brand-new desk or spend $50 on an old table from a secondhand shop?
As long as it’s well made, that old piece of furniture will work perfectly for years and years.
The same concept can apply to other items too: try buying used computers and printers if possible. Of course, there are certain things—like filing cabinets—that can only be purchased new.
But whenever possible, buy used! You’ll save a lot of money. And don’t forget: by using these ideas you’ll also reduce your carbon footprint!
4) Share office space with another business
Many offices make you buy seats on a month-to-month basis, which means paying for space you aren’t using when it isn’t needed. Office-sharing arrangements allow businesses to share workspace when it isn’t needed and save money when extra space is necessary.
This option can be especially appealing for startups that have had trouble attracting talent due to their small office spaces or business owners that don’t want to deal with a long-term lease but still need room for growth.
If you are thinking of starting a shared office space, you should definitely take advantage of these four tips! Use them to grow your company profitably! You may even find yourself enjoying some unexpected benefits along the way.
5) Contract out management tasks
One of the best ways to reduce operational costs is by outsourcing tasks that don’t require someone with specialized skills.
In today’s world, nearly any job can be done remotely and there are many companies looking for work at low cost. For example, you could hire a virtual assistant on Upwork or Freelancer, use a call center in Asia (like Infosys), or even outsource small maintenance jobs like furniture assembly (with companies like TaskRabbit).
In any event, make sure you research thoroughly and choose an option that fits into your core business model—for example, hiring someone who doesn’t speak English very well may not make sense when your business relies heavily on written communication.
6) Create a recycling program
So how can you reduce operational costs and keep that money in your pocket? Easy: Launch a recycling program.
Recycling is actually one of the few green initiatives that will save you money while at the same time doing good for other people and our planet.
You’ll need to run an analysis on where it’s most cost-effective to get rid of waste and what kinds of materials are being thrown away.
But if you collect enough material, for example, old boxes or office paper, then having a recycling program can be profitable! After all, there are plenty of buyers out there who will pay cash money for paper.
7) Use paperless record keeping
Let’s be honest here. You can save a bundle of cash by getting rid of printers and fax machines—just look at how much you’ve paid for all that toner and paper, then factor in how often you use them.
Multiply those costs by three (for office supplies, tech support, and maintenance) and it quickly adds up to $100 or more a month.
What if you invested that same $100 every month into growing your business? Even if only half went toward adding value for customers, it would still double (or triple!) your revenue over time.
At some point, you won’t need a fax machine or printer anymore because everything will just be done digitally (email, PDFs, etc.).
8) Get rid of printers and fax machines
An old-school landline with a built-in answering machine will save you $30–60/per month. VoIP phones can save you even more.
If you work out of an office, consider switching to a phone system that utilizes VOIP for less than $4/month per employee for unlimited local and long-distance calls.
As for getting rid of printers and fax machines, if it’s not a necessity, don’t do it.
You should also think about consolidating systems if everyone in your office has multiple computers or apps that are unnecessary; use free cloud storage (Google Drive and Dropbox) instead of purchasing additional hard drives.
9) Hire interns instead of full-time employees
Interns typically have a degree of energy and enthusiasm that’s hard for many full-time employees to muster.
They don’t have all their material needs to be taken care of, so they’re highly motivated by intangible rewards—recognition, experience, and connections.
If you can harness that energy without having to offer high pay or benefits, it will be worth every penny. Also consider outsourcing certain operational functions: Technology has made it easy and affordable to hire consultants with specialized skillsets and expertise across all areas of business operations.
In some cases, these services are less expensive than hiring a full-time employee—but more importantly, they allow you to focus on what matters most while outsourcing elements like data entry or spreadsheet maintenance tasks.
10) Switch to an automated customer service system
There’s software out there to handle all sorts of customer service tasks.
And if you have an e-commerce business that relies on social media and email, you may already be using a program like Zendesk. But it doesn’t stop there.
Technology can automate almost every aspect of your business, and as long as you know what data points to track, why it matters and how to implement a solution, you’re well on your way to significant cost reductions.
Here are ways to get started with automation:
1. Switch to a self-service platform for customer support: The first step is switching from a human customer service team to one made up entirely of software.
A self-service platform like Zendesk allows customers to ask questions via Twitter or Facebook or even just by submitting them directly through your website.
You can also offer live chat features so they can talk directly with real people (or virtual people, depending on how you look at it).
This eliminates much of the need for phone calls, which are typically more expensive than other forms of communication and also require humans who need training and salaries.