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How to effectively reduce your business costs

Posted on: 17th March 2023

Reading time:  10 mins

How to effectively reduce your business costsHow to effectively reduce your business costs

In uncertain times, it's important to find ways to reduce business costs while retaining maximum productivity. Identifying cost-saving methods now can enable a business to remain competitive and prepared for any future challenges.

Running a business can certainly be expensive. However, there are many ways to reduce costs and increase profitability without losing what matters most, such as valuable members of your team.

In this article, we'll explore some of the most effective ways to optimise office expenses and reduce business costs, as well as how moving to a hybrid working model can be very financially beneficial.

How to effectively optimise office spend

Optimising your office spend is an effective way to reduce costs for your business, and there are several ways to achieve this. Here are some options to consider:

Downsize your office space

One of the easiest ways to reduce office costs is to downsize your office space. Often, when companies rent an office, part of the rented space is not utilised to its full potential.

If your current office is larger than you need, consider downsizing to a smaller space that better suits your needs. This could mean finding a smaller office for rent or subletting an area of your current office as part of a shared office.

Adopt a hybrid workplace strategy

Another way to reduce business costs is to adopt a hybrid workplace strategy. This means allowing employees to split their time between working in the office and working remotely, therefore, reducing the need for a large office and allowing you to downsize your office space or make the switch to a coworking space.

This can help to reduce under-utilised office space and make cost-savings, whilst also increasing employee productivity.

Go remote with an on-demand workspace

Another cost-effective solution is shifting to remote working. With on-demand workspaces available, businesses can rent spaces as and when needed, according to their needs. For example, you can rent spaces for specific purposes only, such as meeting rooms or coworking spaces.

This can reduce business costs whilst still providing the space needed for operations and productivity without committing to a long-term office lease.

Opt for a serviced office space

Take advantage of a serviced office, which is a ready-to-use workspace office for your business. Unlike a traditional office lease, with a serviced office, you only pay for the rented business space you need without having to worry about additional costs, such as utilities and maintenance, as these are all included in the rent.

Serviced office space is usually available on flexible month-to-month terms, giving you the flexibility to scale up as your business grows.

If you do decide to go remote, day offices can provide access to flexible office space by the day, allowing you to stay connected when face-to-face meetings are needed.

Relocate to a more affordable location

Renting office space in a prime location can be costly. Instead, consider office space for rent in a more affordable area or coworking space.

Assess what you need for your business. For example, is access to major transport links important to you and your team? Will you frequently have visiting clients travelling by public transport? Is it really necessary to have an office in a prime location in the city? Or, can a virtual business address with access to on-demand meeting space be more beneficial for your business?

These alternatives may work better for you, especially if you are considering remote working.

Sign up for Regus membership

Particularly useful for hybrid working, Regus membership grants access to the world’s largest network of business lounges. There are coworking packages, office packages, and enterprise packages to accommodate to any size of business.

By becoming part of the Regus global network, you’ll be able to easily find regular networking and community events near you, as well as easy access to offices and coworking spaces wherever you are.

10 ways to reduce business operating costs

Besides reducing office costs, there are many other ways to cut business expenses. From cutting down on energy consumption to outsourcing tasks, there are a variety of strategies you can implement to save money.

1. Renegotiate your office lease

Consider renegotiating the terms when your current office lease is up for renewal. In today’s hybrid working world, not getting locked into a long lease can make all the difference.

Long leases can restrict your business if it ever needs to scale up or down. When renegotiating a new contract, aim for a lower rent or a shorter lease.

2. Set a budget and stick to it

Budgeting is an effective way of reducing business costs and protecting your business from market downturns. Setting and sticking to a spending limit can give you an idea of where you can start to reduce expenditures and make adjustments as you go.

Start by identifying your business income and expenses. If your expenses are higher than your budget, reduce discretionary spending and avoid impulsive purchases to maintain control of your spending.

3. Use the right technology to automate tasks

Automating tasks is a cost-effective way to reduce the time and resources spent on repetitive or time-consuming tasks.

Depending on the type of business you're in, there are several ways to do this, such as implementing task management software, using chatbots to handle customer queries, adopting cloud-based software to help streamline your internal processes, and so on.

Investing some time in exploring these technologies has a high chance of paying off.

4. Cut down on travel

Travel costs, such as air or transport tickets, accommodation, and meals, can add up quickly. Reducing travel by opting for video calls and screen-sharing features can help businesses save money quickly.

This could mean limiting business trips or using video conferencing instead of in-person meetings.

In the post-pandemic world, more companies are adopting remote working. As a result, virtual meetings are often a much more convenient option for everyone.

5. Go green with a paperless way of work

Going paperless is a cost-effective way to reduce business costs. For example, storing documents electronically and using digital signatures, or using accounting software to go digital with invoicing. Note-taking can also go paperless with tools such as Evernote or Microsoft OneNote.

You can even go completely digital with everything that has a digital alternative, such as books, magazines and newspapers.

6. Optimise financial expenditures

Review business expenses regularly and look for ways to reduce interest rates on loans or negotiate better deals with suppliers. At the same time, monitor cash flow regularly to ensure that you have enough money to cover expenses and avoid unnecessary spending or bank fees.

By carefully managing and reducing expenses, you can save money for your business and make it more resilient in difficult times.

7. Consider refurbished or second-hand equipment

Many companies are too quick to discard repairable technology. When buying equipment for your team, consider refurbished, upcycled or second-hand office furniture or equipment as it often fulfils its purpose just as well as brand new.

Not only does this save money, but it's also a more environmentally friendly option. Refurbished equipment is often significantly less expensive than new technology. Overall, this will help reduce business costs.

8. Outsourcing to freelancers and contractors

Outsourcing is another way to reduce business costs. For example, using freelancers or contractors for short-term projects instead of hiring full-time employees.

The benefit of using freelancers is that they can often work on a project-by-project basis, providing your business with the flexibility to acquire the specialised skills and knowledge that may be lacking in full-time employees.

9. Minimise spend on utilities

Minimise your utility bills by adopting energy-efficient practices, such as turning off lights and appliances when they're not in use.

Alternatively, you can try negotiating better rates with your utility providers.

It’s important to get your team members on board and make sustainability a core value of your business. Encourage staff to be more energy efficient through a combination of education, incentives, and leading by example.

Provide staff with information and training to staff on how to reduce energy consumption in the office. This can include things like adjusting thermostats or using energy-efficient bulbs and appliances.

Consider creating a programme that rewards employees for reducing energy consumption. Incentive ideas include gift cards or bonuses for individuals or teams who come up with the most effective energy-saving ideas.

10. Sign up for discount programmes

Another effective way to reduce business costs is to sign up to discount programs. Take advantage of bulk-buying deals, or join a buying group to negotiate better prices on products and services.

Reduce business costs with a flexible office

If you are considering an office relocation, there are ways to reduce office costs and stay productive. From coworking spaces to renting flexible office space, Regus makes it easy to find what works for you.  Speak to an expert today.

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