Reducing operating costs

6 Key Strategies to Reduce Business Operating Costs

Every business wants to increase its profits, but those profits are especially crucial to small businesses. Even the smallest reduction in expenses or increase in revenue can have a major impact on your profitability.

The good news is you don’t need to completely overhaul your company to start seeing savings. With a few key strategies, you can start to see an improvement in your business practices and a drop in costs.

One of the best ways you can increase revenue is by reducing your operating costs. But how do you reduce business operating costs without lowering the quality of your work?

How can I reduce my operating costs?

 Operating costs are one of the biggest business expenses aside from payroll and rent. Check out the following seven tips you can use to reduce your own costs and add to your company’s profits.

  1. Outsource business tasks. Many small businesses outsource certain tasks or operations to companies that specialize in areas like marketing, accounting and bookkeeping, data entry and IT support and development.

    One reason businesses turn to outsourcing solutions is the total time-saving involved. You don’t have to recruit, onboard, setup payroll, etc. Best of all, you can focus on what you’re best at, and let experienced professionals support your efforts with what their best at.

You also don’t have to worry about paying for each individual employee. When you outsource, you have access to an entire team of experienced professionals for a flat fee.

  1. Streamline your accounts receivable. Outsourcing is also key when it comes to your accounts receivable process as well. Invoice funding, or invoice factoring, can save you the time and frustration that can come from collecting your outstanding invoices from your customers. Invoice funding is a type of accounts receivable financing that converts your company’s outstanding invoices that are due within 90 days into immediate cash for your business. Invoice funding also fills in the cash flow gaps that can happen when your small business is growing. These gaps can be stressful and taking out a bank loan may not align with your short- and long-term growth objectives.
  2. Negotiate your subscription rates. Offer to pay a monthly or annual fee to your suppliers for a reduced rate on the supplies you regularly use. By asking for a subscription rate, you show your suppliers that you’re prepared to shop around for the best prices. It also shows that you’re not afraid to leave that supplier if it means getting a better deal somewhere else.

A lot of subscription-based SaaS software also provides savings when you choose an annual versus a month-to-month option. In the long run, these savings can add up across your different providers.

  1. Think about going second-hand with your office furniture. You might feel the need to replace the old office chairs and desks you have in your workplace. But worn out furniture doesn’t need to be replaced with brand new furniture. Oftentimes, second-hand furniture from local office supply stores or thrift stores can be almost-new. You can also make repairs to your worn-out furniture itself with re-upholstering and other DIYs. Plus, it provides character to your office space.
  2. Consider selling your leftover supplies. Your first instinct as a small business is to recycle your leftover cardboard, paper, and metal. But other small businesses or entrepreneurs in your area may need those materials. You can take advantage of that by selling your leftover materials rather than recycling them. You can also find other ways where you can use your recyclable waste for your own business and products.
  3. Reduce your travel expenses. Virtual meetings are becoming increasingly popular as businesses go digital. You can use virtual meetings as a way to save time and money on travel. Consider using virtual meetings as a way to replace staff meetings if you have staff distributed across many locations. You can also watch live video feeds of business events when necessary rather than traveling to the events yourself.

Interested in invoice funding for your business?

There are more than six ways to improve your bottom line and streamline your processes. But invoice funding, also known as invoice factoring, can help improve your cash flow immediately.

When you work with Triumph Business Capital, you can worry less about when your clients pay you and more on providing a great customer experience.

To learn more about our how small business invoice factoring works, contact Triumph Business Capital today.