73 Cost Cutting Ideas for Business Cost Reduction | Simple Business Solutions

73 cost cutting ideas for business cost reduction

By: Tim Rayl, Chief Marketing Officer (CMO)

Business cost reduction is a force multiplier on your cash flow. If you don’t know where to begin cutting costs, we’ve compiled a list of 73 cost cutting ideas to help you reduce expenses and improve profitability. But first, let’s look at three common business mistakes you must avoid.

Avoid Fatal Mistakes When Cost Cutting

  1. Reducing or eliminating your sales team
  2. Reducing or eliminating your marketing budget
  3. Reducing or eliminating systems or technology that make your operation more efficient

Too often companies make fatal mistakes when cost cutting. They grow frustrated with weak sales numbers and a marketing plan that they don’t feel is working so they fire salespeople and gut the marketing budget. This is shortsighted because they are shutting down their primary source of cash flow. A properly executed marketing strategy generates quality prospects for salespeople. Competent salespeople generate new revenue by converting prospects into customers.

You must protect your investment in profit generators wherever and whenever possible. Here are some ideas to get you started.

73 Cost Cutting Ideas

Below are 73 areas where you can identify cost savings. As you read through the list, pause for a few moments at each cost cutting idea and ask yourself if there is something you can do at this moment to reduce your expenses. The key is to consider all possible alternatives. For example, could you obtain a higher level of service and reduce expenses by utilizing a Professional Employer Organization (PEO) instead of insourcing Human Resources?

    Payment Processing
  1. Credit card processing
  2. Debit card processing
  3. EBT card processing
  4. Gift/Loyalty card processing
  5. Check processing (check guarantee/check conversion)
  6. Online payment processing (electronic funds transfer, ACH)

  7. Telecommunications
  8. Local telephone lines
  9. Local telephone features (Caller ID, Call Waiting, etc.)
  10. Local calling costs (cost per minute)
  11. IntraLATA calling costs
  12. Directory Assistance call costs
  13. Intrastate calling costs
  14. Interstate calling costs
  15. Toll Free number costs
  16. Wireless telephone service plans
  17. Internet access
  18. Telecommunications systems maintenance service agreements

  19. Information Technology
  20. Managed network security costs
  21. Network monitoring expenses
  22. Network management expenses
  23. Disaster recovery expenses
  24. Remote IT support costs
  25. Onsite IT support costs
  26. Document scanning costs
  27. Document printing costs
  28. Outsourced scanning service costs
  29. Document management service costs
  30. Backfile scanning and conversion service expenses

  31. Office Machines
  32. Printers
  33. Copiers
  34. Scanners
  35. Faxes
  36. Toner
  37. Paper
  38. Office machine leasing costs
  39. Office machine maintenance service agreement expenses

  40. Business Insurance
  41. Workers Compensation insurance
  42. Health insurance
  43. Professional Liability insurance
  44. General Liability insurance
  45. Property insurance
  46. Directors and Officers insurance
  47. Vehicle insurance
  48. Wrongful Termination / Sexual Harassment insurance
  49. Business Continuance insurance
  50. Other specialized insurance

  51. Human Resources
  52. Employee Recruitment
  53. Employee Training
  54. Payroll Expense + Payroll Administration
  55. Benefits + Benefits Administration

  56. Retirement Plan Administration
  57. Plan Administration
  58. Tax Filings
  59. Record Keeping
  60. Investment Management

  61. Finance & Accounting
  62. Consolidate and or refinance business debt – work with community banks in your area. Also check out Superior California Economic Development’s SBA refinance program
  63. Evaluate the interest rates and fees associated with any business lines of credit
  64. Evaluate the interest rates and fees of all business credit cards
  65. Use business credit cards that provide a cash back reward on all purchases (and bonus rewards on purchases in certain categories) – rewards range between 1% and 5%
  66. For customers that are chronically late payers, move them to online payment processing (EFT/ACH) or credit card payment. Decreasing the Days Sales Outstanding of your Accounts Receivable will have a substantial impact on your cash flow, plus, it will help you utilize less of your line of credit if you have one.
  67. Contact your local Economic Development Center to investigate which local, state and federal tax credits and incentives your business may be eligible for

  68. Marketing and Advertising
  69. Work to continuously improve marketing effectiveness and marketing efficiency
  70. Motivate happy, loyal customers to talk about your business online and offline
  71. Partner with businesses that are complementary to yours and share the cost of advertising
  72. Consider pay-for-performance advertising. In other words, you pay X whenever you receive a sale from that particular advertising vehicle or marketing tactic
  73. Move hourly or salaried salespeople to a performance-driven compensation structure

  74. Postage
  75. Utilize a bulk mail permit
  76. Evaluate using a mail house to print, sort and apply postage for bulk mailing
  77. Switch to sending electronic invoices/statements instead of paper invoices/statements
  78. Ditch the Pitney Bowes machine ASAP

  79. Leverage Purchasing Power
  80. Join or form a cooperative buying group to leverage purchasing power
  81. Join free rewards programs
  82. Make purchases less frequently so that you can buy in bulk and obtain volume discounts
  83. Time purchases to take advantage of coupons and sales

A Simple Solution

While this list is helpful, it may be that you don't have the time to perform a thorough cost reduction analysis. You can engage our cost reduction consultants to take this burdensome action item off your "to do" list.

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