Cutting business expenses is a necessity for all companies, but especially now with the uncertainty caused by the ongoing pandemic. Here are some ideas to help tighten your belt, outside of the tough personnel decisions.
- Credit card interest rates. Interest rates are at historic lows and all your debt facilities should be reflecting this new rate environment. The first place to review is your company credit cards. Ask your current credit card bank to lower your interest rates. You may have more luck if you are a long-time, loyal customer who has always made on-time payments. Ask for the lower rate, even if you never carry an unpaid balance. If they are unwilling to move, consider changing credit card providers.
- Review other debt. Also consider asking your banker about refinancing other debt, such as installment loans or revolving lines of credit, to a lower interest rate. With this tough rate environment, banks are looking for well run businesses that are proactively managing their risks.
- Telephones. Many companies are relying on the same hardware and service they bought 40 years ago, which can cost plenty to use and maintain. Consider transitioning to a Voice over Internet Protocol (VoIP) service that can easily integrate with mobile phones and other electronic devices.
- Internet service. Similar to your telephone service, it’s easy to sign up for internet service and forget about it. If it’s been more than one year since you’ve spoken to your internet service provider, get on the phone and ask about different options. Maybe you’re spending for more bandwidth than you need or unnecessary add-ons like a turbo boost.
- Data storage. The cost of storing data in the cloud has become extremely affordable over the past 5 years. At the same time, many businesses overestimate the amount of storage capacity they actually need. Consider doing an annual audit of your storage needs and asking your provider about different capacity levels if you find you have ample, unused storage space.
- Software as a Service. These services are popping up like weeds and every one of them is a monthly service charge that goes on forever. Review your cash disbursements and note any recurring charges. Once identified, review each one for their relevancy. Many of these services charge per user. Trim the user fee to one or two people. The savings add up quickly.
When reviewing your expenses ask yourself whether the expense is truly adding to your bottom line. If not, make it a candidate for the chopping block.