Simple, Effective Ways to Lower Your Business Costs in 2022
As you think about lowering your business costs, you shouldn’t leave any stone unturned. There are literally thousands of dollars worth of savings in every corner. You just have to be proactive about finding them.
Technology has offered businesses an efficient and effective way of managing their day-to-day activities. This includes managing financial obligations such as taxes. There are now life admin apps and software that helps companies in managing their taxes online. One example is One Click Life which is managed by qualified tax accountants to helps individuals and businesses with their finances in one place.
Technology has offered businesses an efficient and effective way
Here are some of our best ideas:
Switch to a Virtual/Hybrid Business Model
Remote working has been around for decades, but the recent pandemic shoved this movement into the spotlight and showed businesses that it’s not only possible to run a company virtually – it’s practical and cost-effective.
Using a business phone can integrate all the applications you use for remote work – and cut down costs.
Running a virtual or hybrid business model where employees work remotely offers numerous benefits. This includes better work-life balance for employees, a wider talent pool for new hires, and increased productivity. But it’s the cost savings of lower overhead that’s most beneficial.
“Companies that don’t have to pay for employees’ office space and supplies can save quite a bit in a year,” entrepreneur Marky Kelly writes. “One study showed that if a company allowed an employee to work from home just half of the time, it would save on average $11,000 per employee, and each employee would save between $2,000 and $7,000.”
If you have an office with 25 employees, switching to a hybrid business model (working remotely half the time) could save you as much as $275,000 per year (or $23,000 in overhead per month). Switching to a completely virtual setup with no central office would save you thousands more.
Use IT Support Substitutes
When it comes to maintaining your IT assets and software, support plays an important role. But if you aren’t careful, these ballooning costs can be a drag on your bottom line. Using the vendor’s own support often becomes too expensive after the initial period ends. Thankfully, there are less expensive alternatives.
In addition to moving toward a hybrid business model, you can look for office infrastructure maintenance savings from reputable third-party providers. Support substitutes, like Cisco SmartNet alternatives, for your networking equipment maintenance, can make a huge difference. They’re often affordably priced – as much as 30 to 40 percent lower – and provide the same quality support. Simple little switches like this can save thousands per year.
Transition to Freelancers (When Possible)
The rise of freelancers is another recent trend that’s gained serious momentum in recent years. And while it’s often viewed as an advantage for professionals who want to call their own shots and enjoy greater flexibility, the reality is that it’s even more beneficial for employers.
Even at a higher hourly rate, freelancers are less expensive than full-time employees. By one account, they cost 20 to 30 percent less annually. This is due to not having to provide benefits (like health insurance and retirement plans), as well as avoiding payroll tax, Medicare tax, or Social Security tax.
Switching to freelancers isn’t always possible (or even preferable). However, it’s smart to at least open your eyes to the possibility of doing so in 2022. Freelancers are ideal for marketing tasks and any projects where your demand fluctuates throughout the year.
If you haven’t already gone paperless in your company, now’s the time to make the transition. It can significantly reduce your expenses and potentially make it easier to shift from a physical office to a virtual office – paving the way for even more savings.
In a company with 24 filing cabinets and 100 employees who each make an average of $15 per hour, costs are estimated to be:
- Paper Costs: $8,000 annually
- Filing cabinet costs: $8,433 annually
- Space: $1,265 annually
- Labor costs: $30,240 annually
And those are just the basic costs. This isn’t even accounting for the loss of productivity and other ancillary expenses.
Thankfully, making the switch to a paperless office is more practical than ever before. With the right cloud storage solutions and electronic signature software, you can take any paper-based process and digitize it with little effort or cost.
Putting it All Together
There are a million ways to spend more money in your business, and there are a million ways to spend less. The choice is yours.
If you’re strategic in your approach, you can spend more in certain areas, cut back in others, and still walk away with a beefier profit margin at the end of the day. It’s all about identifying when and where you need to spend, while eliminating the fluffy costs that add no value to the bottom line.
Use this article as a launching pad for lowering your business costs this year and getting ahead. It won’t always be easy – and certain sacrifices will have to be made – but the results will speak for themselves.