No matter how profitable your company may be, it is always a good idea to be on the lookout for ways to cut costs and increase profitability. A failure to do so could cause today’s stellar success to become tomorrow’s bankruptcy.
Cutting costs doesn’t have to mean penny-pinching, it can refer to cutting down on wasted time, energy, efforts or material. In addition, when you find ways to cut costs in one area, it can also provide capital to better improve your business in another.
Here are 5 ways to use technology to help you cut expenses.
Moving to the cloud offers a vast array of benefits. Not only will it save you a small fortune in hardware expenses, but it has also become even safer and more secure than physical servers. This might not only save you money but save your business by making you less vulnerable to hacking, data theft or data loss.
Cloud services also have their own round-the-clock IT personnel to make critical security updates are made the second they are available. They also ensure systems stay humming along and you have access to all of your data when and where you need it.
Moving to the cloud also frees you from your desktop and provides access to everything you need from anywhere you may roam.
Free Apps and Services
With just a little investigating, you may find several free versions of some of the most popular apps and platforms you use for business. In fact, some of the most popular apps and platforms also offer free versions of their own software. While the free versions may not come with all the bells and whistles of the paid versions, you might find that the free versions offer you everything you need.
For instance, instead of paying for a subscription to KISSmetrics, you can get much of the same information, if not far more, from a free service like Google Analytics. There is a wide range of free applications that will allow you to create and distribute your own marketing materials and even do your own books.
Before paying for a new app or platform, do some investigating to see if you can’t find what you need for free.
Automate When Possible
There is a reason no one uses the term “waste of time” as a favorable one. Not only are some of the most mundane tasks a waste of your valuable time, they are also rarely enjoyable. This means that many times they get put off. Just because routine tasks are routine, however, does not mean they are not important.
The saying “time is money” is no more accurate than with billing. The faster an invoice is submitted or processed, the sooner you get paid. E-payment systems can also ensure bills get paid on time, saving you from costly late fees or surcharges.
Automating several bills and payment systems will not only save you money, it can also improve your cash flow and just put you in a better financial position overall.
While it may seem that going green is more expensive up front, there is a wide range of ways to go green that also benefit your bottom line. Investing in electronics with a high energy star rating can help minimize electrical consumption which can significantly reduce utility bills.
In addition, electronics that consume less power also generate less heat, which saves even more in cooling costs.
Since cooling costs are generally higher than the cost of running the electronics themselves, this can save you almost double or even triple the amount in overall energy costs. Using CFL or LED lights can also save you a significant amount in energy bills.
Just like with energy star electronics and appliances, not only do they consume up to 75% less energy, they also generate less heat.
Outsource When Possible
In 1906, an Italian economist named Vilfredo Pareto introduced a mathematical formula to explain the unequal distribution of wealth in his country.
Since then, the Pareto Principle has been used in a wide range of fields and it is known as the 80/20 rule. 20% of your work is most likely to produce 80% of the results, while the other 80% of your work will only produce 20%.
The key to using this principle is to figure out which 20% of your work accomplished most the results and focus on that – and outsource the rest. When determining what you need to accomplish yourself and what to outsource, you need to ask yourself two things:
- How much time does this task take me and how much income could I be generating at that same time?
- How much will it cost me to have someone else do this?
If you can generate more income in the time you take to accomplish certain tasks than it would cost you to pay someone else to do it – pay someone else to do it. In the digital age, you no longer need to even hire full or part-time employees to outsource your work to.
From accountants and bookkeepers to web developers, graphic designers and marketers, there is an almost unlimited range of freelancers you can hire on a project by project basis.
Cutting costs does not mean sacrificing growth.
In fact, quite the opposite.
When you prune a tree, it frees up valuable resources that help the tree grow lusher, stronger and more abundantly. Sometimes cutting costs simply means cutting dead weight, which can help your business flourish, grow and thrive.