5 Ways to Cut Costs Without Outsourcing

by Stephanie Faris on January 28, 2013
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Outsourcing contracts are down 19 percent, according to this recent report, with many U.S. companies bringing operations back home. This is generally good news for the nation’s economy, but some small businesses say that domestic services and manufacturing costs are still too high for their budgets.

Fortunately, in 2013 you don’t have to outsource to save money. Before you go looking for cheaper help overseas, here are five alternate ways to cut costs.

  1. Use cloud computing services. If your small business is still relying on desktop PCs and an in-house server, you may be spending more than you need to on IT. When it comes time to replace your systems or software, consider moving your company’s data to a cloud-based file server. Security is typically solid, and you won’t have to pay an expert to set anything up.
  2. Let employees telecommute. If possible, allow your staff to work from home at least one day per week. You’ll immediately see a cost savings on your electricity bill, and you may ultimately be able to relocate to a much smaller office (where the rent and other expenses are lower).
  3. Outsource locally. Bring in freelancers or contractors for short-term jobs. You won’t have to pay a full-time salary with benefits to employees who you may not need after a project is completed. If a particular temp worker stands out, you may be able to hire them to fill a current or future position, which could help you cut recruiting and training costs.
  4. Use interns and co-ops. Many college students are interested in doing internships for modest or no pay, in order to gain experience or to earn the academic credits that they need to graduate. These interns are often enthusiastic, energetic, and eager to learn, too. Many colleges and universities also offer co-op programs in which they work with local businesses to provide work opportunities to students. While interns generally work part-time hours, co-ops are often full-time, with at least minimum wage pay expected. Your local college can help you determine if the right candidate is available to help meet your business needs.
  5. Adopt lean processes. Taking a cue from the lean manufacturing principles introduced by Toyota, businesses all over the country are re-evaluating every aspect of their day-to-day operations. Reallocating or eliminating idle equipment, unproductive personnel, and unused workspace — anything that fails to add value — can save thousands of dollars each year. By implementing lean processes, small businesses can cut costs without sending jobs overseas.
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