Freelance Work and Business Creation

Cost Cutting Methods For Your Business

by Freelance

Cost cutting methods are essential not only for large scale businesses but also for small home-based businesses and the freelancer. In fact every business owner should be considering cost cutting strategies for their business due to the recent economic downturn. By implementing cost cutting strategies a smart business owner can increase their overall profits. Before planning a cost cutting strategy, it is essential to analyze the current expenses of your business and then plan on how to reduce your overhead costs.

There are various ways through which a business owner can reduce their company’s expenses. However the cost cutting methods would differ from one company to another depending upon their business model. While we talk about “cost cutting” many employers would automatically think about job cuts. Of course job cuts do matter when there is an excess workforce with little demand for the specific work conducted by those employees. But there are also other factors that can help your business in reducing costs. Below are some of the common cost cutting techniques that can aid a business owner to survive in these economic times and to drive their business towards the path of financial success.

Marketing Expenses

Often a small scale business owner or freelancer will spend thousands of dollars per month on their marketing campaigns. But many fail to calculate the return on investment and don’t understand the importance of reducing marketing expenses if they are not working as intended. Cost cutting on marketing campaigns does not imply that a business should reduce the frequency of advertisements. It means to derive the best results with the lowest marketing budget possible to see results. A real life example would be to transform your advertisement campaigns from offline advertisements, like newspapers, to online advertising. The downturn has also made some forms of advertising cheaper – so take advantage of it while it lasts.

Negotiating Purchases

Any business owner can negotiate with their suppliers to reduce the prices of raw materials or other office/business purchases. As a matter of fact the supplier would be ready to offer you the best competitive price to ensure continued business with your company. Negotiating can be very much in your favor if you are a prompt payer and a long term buyer. Still, don’t be afraid to shop around and play one supplier off on another. They will compete to get your business. Don’t hide the fact you are looking elsewhere!

Travel Expenses


If your business model involves travel, there may be times where you have to afford the travel/lodging expenses for employees who happen to visit other towns or cities for meeting or training purposes. You can make use of new technologies and reduce such traveling expenses. Online conferences could save not only money, but the time involved in traveling. For instance you could conduct a video sales conference over the internet instead of in-person meeting.

Telephone, Office Supplies and Internet Bills

Train your employees to use the telephone, internet and other expense producing things in a productive manner. Reduce usage of all office supplies. For instance, do paper copies really need to be made or will keeping a hard-drive backup suffice? Make them understand that cost-reduction through such practices can result in more profits for the business and eventually they would be rewarded in the future (pay hike, job security etc.).

Loans, Lines of Credit and Credit Cards

As a freelance worker or small business owner you may have to apply for loans, lines of credit and even business credit cards. When applying for such loans and forms of credit, carefully analyze the interest rate that would be charged. Always apply for loan/credit cards that have low interest rates, favorable payment terms, rewards, and cash back etc. If you don’t really need to get credit, don’t. Avoid debt whenever possible. If you are already carrying debt talk to your banker about consolidating or reducing the interest rate. You’d be surprised how much they want to help you.

Insurance Premiums

When buying business insurance, auto insurance, and similar policies for your business, make sure you shop around and find the best policy that covers most of the risks at a cheaper premium. You could save hundreds of dollars by reducing your insurance premiums. Like dealing with your suppliers, be ready to fight to get a better deal and always ask about special offers.

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