7 Ways to Cut Your Costs

Keep an eye on your costs to improve your bottom-line performance. Here are some tips to help you reduce your operating expenses.

Reduce production costs.

Try to negotiate better supplier or raw materials pricing. Streamline production. Barter or trade with suppliers who offer services you need or try a barter exchange like Trade Exchange Canada.

Reduce travel.

Use alternative communication tools such as video conferencing, three-way calling, webinars (online seminars), or Skype®.

Look at salaries, wages, and how people work.

  • Can you use contractors, who can cost less than full-time employees?
  • Consider intern/co-op/work experience staffing and students. They might require some ramp-up time, and you’ll be expected to mentor them, but you’re also growing new team members at a reduced cost.
  • Apply for Work-Sharing Opportunities through Services Canada.
  • Let employees work from home if it saves on utilities or space.
  • Explore alternative work arrangements, such as job sharing.
  • Consider a shorter work week.
  • Have a pay or bonus structure review.

Consider location.

Make sure you’re still in the right location but attempt to get a lower cost per square foot than your existing space. Consider choosing (if it makes sense for your business) industrial space vs. high-priced retail space.

Review your delivery/transportation costs and routes.

Is your product delivery being done as efficiently as possible? With more planning, or more “bulk” deliveries, could you be more efficient? Attempt to share costs with other businesses.

Reduce expenses and rationalize all costs.

Decrease utility expenses by turning off all equipment and computers at night. Reduce variable overhead expenses. Increase efficiency in your production, or administrative activities.

Make money while you’re not there.

Sublease excess space or rent space out to a business that operates during different hours than you (for example, consider sharing your kitchen if you’re a caterer, or rent your boardroom for evening gatherings).