Many small and medium sized business owners are stuck with ideas on how to cut costs and make their ventures more profitable for years to come. Cutting expenses short term is easy, but making sure that the company is sustainable and can grow further is more challenging. Below you will find thirteen ways to reduce expenses that will improve your company’s profitability without damaging its reputation. Focus on these areas, and you will find that planning for growth is easier than you thought.

Running Costs

From electricity to heating and rent, there are inevitable running costs for all businesses. You will need to pay certain taxes and health insurance for your employees. While you don’t have a choice whether or not to pay these expenses, you can shop around to find the most suitable deal. If you can sign up for a long term energy deal, or invest in green technologies, you can reduce your carbon footprint and monthly fixed expenses at the same time.

Delivery and Storage

If your company manufactures and delivers products, an expensive part of your supply chain might be storage and delivery. You should shop around to make sure you are getting the best value for international shipping and account management. Search for providers in your area. Get a comprehensive freight quote to see whether you can save money by signing up for a yearly or monthly contract. The faster and cheaper you can get products to customers, the faster you will get paid and increase your profit margins.


Most small and medium-sized businesses sign up for an advertising deal for a few years, and believe that a set-and-forget marketing infrastructure will deliver results. If you are not getting customers from your online and offline advertisements, it might be time to find a more cost-effective option. You may want to do your own marketing or talk to an SEO agency to create long-term customer engagement campaigns and build your brand reputation online.


Instead of using expensive stationery, you might want to stand out from the crowd and use beautifully designed recycled sheets. You can also reduce your company’s paper use by using cloud computing and sending agreements, invoices, and updates to customers via email or collaboration platforms. If your printer is essential for your normal operations, you can buy recycled and refurbished cartridges to save money.


If you are using an accounting firm for your bookkeeping, you might want to opt for an in-house solution, or employ a virtual assistant. Training your employees on bookkeeping can pay off long term, and you will be able to keep an eye on your finances better if they are being handled by one of your workers. Using a virtual assistant to update your records can be cheaper, but you will have less control over the quality of work.

Press Releases

You can get free publicity from local and web-based news publications. Sponsoring a charity or a sporting event might get you a headline in the local paper, and you can include your location, website address, and contact details in the article. Winning an award, or gaining an extra accreditation can be newsworthy. You can engage with a professional press release company that can get your news story featured on Google and other search engines. Small changes can make a big difference, and you need to look out for free opportunities to get publicity in your local area.

Open Source Software

Instead of getting a professional software developer to create custom resource management, bookkeeping, and payroll software for your small business, you can take advantage of open source resources and tailor them to your needs. From Microsoft Office alternatives to advanced accounting, there are several open source files available for companies. Don’t forget to check out free apps on the cloud that can provide a cost-effective solution to manage your projects, workforce, and resources. Use fee collaboration software to interact with remote workers or employees who are always on the move.

Employee Leasing


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For quiet business periods, you might put agreements in place with other companies to lease your workers. You don’t want to lose talent that you developed just because your company is going through a quiet period. Likewise, while you are renovating the warehouse, or moving from one location to another, you can lease your workers to other companies that need them, so you will have your existing workforce ready when your business is back up and running.

Barter Deals

An innovative way for saving money in your business on essential costs is entering into barter deals. The main benefit of barter deals is that you will not have to pay for the services in cash. You can compensate the other party by offering services they need. As an example, you might need office decoration soon, and a company that offers this service needs your accounting expertise. You can enter a barter agreement, and you don’t have to save up for the project. Both parties benefit and can potentially reduce their corporate taxes at the same time.


man and computer

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Offering your employees a chance to telecommute can have several benefits. You can reduce the cost of maintaining and heating your office, while keeping your workers happy. You might not need to invest in a larger office as your team works, and save money on property-related expenses. Your workers will, in exchange, enjoy the extra few hours a week that they don’t have to spend commuting to the office.

Subletting Business Property

If you’re not using the entire office or warehouse, you could sublet it to other companies. If you know for sure that you are not going to need the space for expansion, you can reduce the cost of maintaining your building. This will save money on business premises insurance and security, and leave you with more money to invest in your business long term. Even if you only let out your meeting room occasionally, you can have spare money to maintain the condition of the building and reduce regular expenses.

Word-Of-Mouth Marketing

Instead of buying expensive ads, you can rely on word-of-mouth advertising. Ask your customers to recommend your services to others, and offer a discount for each referral. This will help you avoid paying for advertising that doesn’t work and get more customers for less. Word-of-mouth advertising is often underestimated by business owners. Talk to your suppliers and business partners about reciprocal advertising. See whether or not this can be a benefit for you and them. Use online review sites to get customers to leave feedback on the services received. 

Form a Buying Group

If you regularly buy supplies and raw materials for manufacturing products, you might want to join other companies and form a buying group. You will be able to secure discounts by buying in larger volumes and have a greater leverage on suppliers to drop prices. Collectives and trade associations have great lobbying power, so if you want better deals, you might consider joining one of them. From office supplies to cleaning products and raw materials, chemicals, you will increase your profit margins by reducing your operational expenses.

Whether you own a manufacturing business or a business consultancy, you can find effective ways to reduce operational costs. Look at your monthly expenses and search for areas where you can introduce more cost-effective solutions. This will help you to increase your company’s competitiveness, revise your prices, increase your profits, and have more money to put towards long-term investments to grow your business. If you are not sure which area to tackle first, you might need to talk to a  business finance analyst, who can find development areas.