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2018-08-08 20:39:56Finance and Accounting: ExpensesEnglishWith the right cost-cutting strategies, you can reduce expenses without sacrificing the quality. Hence, here are tips on how to cut... to Cut Costs in Business Without Compromising Quality?

How to Cut Costs in Business Without Compromising Quality?

2 min read

If you run a small business, you’re probably operating on a tight budget. When the unexpected happens — if prices of raw materials rise or your sales slow down, for example — it can cause problems with your company’s cash flow. With the right cost-cutting strategies, you can reduce expenses without sacrificing the quality of your product or service. Hence, here are tips on how to cut business costs to keep your cash flows intact.

1. Save Money With Secondhand Equipment

When you need to replace or upgrade something in your business, buying used products is one way to cut costs without compromising your operations. Instead of investing in new office furniture, look for high-quality used models when corporations remodel or go out of business. A used printer or copier can save you money without affecting functionality. Do you need another industrial machine? Cut costs by buying gently used equipment from a company that’s upgrading or expanding. Secondhand equipment doesn’t depreciate as fast and it holds its value longer, which can lead to additional savings in the long run.

2. Cut Office Rental Costs

Office space can be expensive, especially if your business is located in a major urban area like Delhi or Mumbai. If your rent is taking up a big part of your monthly budget, consider an alternate arrangement. If you have a very small staff and computer-based operations, you could save money by giving up your office and moving to a co-working space. Another option is to allow your employees to work from home — when you need to be in the same spot, meet at coffee shops or rent a conference room. If that’s not possible, consider sharing office space with another small business to cut your rent in half.

3. Reduce Utility Bills

Utilities are also a prime opportunity for cost-cutting. Start with simple steps, like turning off the lights when you’re not in the room and shutting down computers when you leave for the night. During India’s intense summer heat, use smart thermostat controls to turn down the air conditioning outside of business hours. That way, you can keep staff comfortable during the work day but save money on electricity at night. If you own the building, consider retrofitting your HVAC system to make it more efficient. Even a 10% increase in efficiency can lead to serious savings on your monthly utility bills.

4. Cut Periodic Expenses

Over the years, your business has likely purchased a variety of periodically billed services, such as online service subscriptions and professional memberships. When you need to cut costs, it’s a good idea to examine these expenses individually. Do you use the product or service on a regular basis? Is it adding value to your business? Is it necessary? If the answer to those questions is no, it’s probably safe to eliminate the expense. Cutting out just a few options can add up to a significant savings over the course of a year.

Cutting costs doesn’t have to be a painful experience. By selecting options that don’t affect your operations or your end product, you can reduce expenses while maintaining happy employees and customers.

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

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