5 easy ways for small businesses to cut costs

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Reducing business spending during a recession is one of the few available ways to secure a place in the market and make a profit from your business. The wrong strategy to reduce a company's expenses can cause it to go bankrupt. However, there are ways to reduce company costs without jeopardizing the business.

By saving money on utilities, you can attract the best specialist even from abroad without increasing overheads. And the money that goes into shipping and maintaining the "high status" of the business, you can safely use to grow it.

Here are 5 ways you can avoid the costs that threaten to "eat" your money.

1. Keep track of your utility costs and motivate your employees not to waste energy

The money you pay for telephone, internet, lighting, and heating can also be saved. It is especially important to keep track of this now because Ukraine is changing utility tariffs again. There are a lot of errors in charging, so every businessman must be ready to prove his case.

It's also important that your staff is also motivated to save money. Little things like turning off computers and other equipment when they go home, and turning off the lights in rooms like toilets when they leave, both save money and reduce emissions.

2. Freelancers do the same work, but you don't have to pay taxes for them

Before hiring new employees, think carefully about whether you need another worker in the office to perform these duties. If your answer is no, hire someone to work remotely. Freelancers do the same work, but there is no need to increase overhead costs for the sake of hiring another permanent employee.

You can track the work of remote employees with the help of the Internet, and look for them on freelance exchanges. And don't limit yourself to your country - that way you will find exactly who you need, leaving out where he/she lives.

3. Auditing your suppliers will save you from irrational expenses

Are you used to your suppliers? Do you trust them because you've been working together for many years? But extra checking and comparing prices with other suppliers certainly never hurts. This is business, and you should always look for something better.

A lot of money can even go into indirect purchases - little things like stationery, water, and coffee for the office. In some cases, you may even spend a little more money now, knowing that you can rely on a certain supplier in the future. But a systematic check is never unnecessary.

The same goes for providers of various financial services. For example, take a closer look at cloud-based account opening and international payment management solutions like Transferra - maybe your current solution isn't as profitable.

4. Review even minor costs and look for ways to reduce them

Your costs don't have to grow every day - there are always ways to cut them. Look at where your money is being spent and, if you feel that these costs are exorbitant, find ways to reduce them.

For example, through well-chosen courier services.  To maximize savings on this will help to carefully familiarize yourself with the tariffs - express delivery should be used only in extremely important cases because the rates for it are much higher. It is also necessary to constantly inquire about promotions and the availability of discounts on a particular type of courier service.

5. Control the amount of tax deductions

To do this, keep track of all, even the smallest expenses, and keep a record of receipts and invoices - get your accountant involved.

Avoid tax penalties - sensible organization and filing documents with the tax office on time will save you from penalties. And also pay attention to possible benefits for your business from the state.

Here are a few other areas to consider:

●      Reducing the cost of "maintaining a high status". This may include moving to a less prestigious and less expensive office. "Consolidation" of services, divisions, and personnel in the occupied premises, abandonment of excessive areas, and their lease or sublease. 

●      It is also possible to reduce the cost of company vehicles. If it's full of expensive and uneconomical business cars, you'll have to spend a lot of money on fuel and maintenance.

The recession period is a real test for business. But as a result, it will teach you how to effectively manage your company's costs. It is now that businessmen are finding many progressive solutions that they would not have even looked for if it had not been for the crisis. Try to look at your business from a different angle, and you are sure to find where you can save money, and perhaps even make money.