How to reduce your small business costs in 2023
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How to reduce your small business costs in 2023

We’ve previously looked at quick and (relatively) simple ways for you to cut small business costs in the new year. Those ideas, including a software audit and being more time efficient, were small and actionable ways you could keep business spending down.  

Now, in this blog, we’ll look at more large-scale cost reductions that you could implement to improve your small business’ financial situation.  

Major cost-cutting measures for your business

The challenge for many small businesses is to make impactful changes that don’t negatively affect staff. Reducing your workforce might feel like a simple way to cut costs but in the long run it could cause more problems. Remaining staff members will see their workload increase significantly and you’ll stretch your resources too thinly.  

So, what can you do to reduce small business costs in 2023? 

The first thing you should consider is your business space. Whether you have a large or small office, there are always opportunities for you to downsize to save money. It might be that the space you once needed isn’t required thanks to the shift towards hybrid working that some of your team might have done.  

Relocating to a smaller space can be a stressful experience but the money you’ll save on rent and utilities will make the hassle worth it. If your small business is made up of just a few employees, then shared coworking spaces provide all the facilities you’ll need at a fraction of the cost.  

You could even make the leap to a fully remote business that doesn’t have a physical office. With the right tools, like a cloud-based phone system and Microsoft Office, you can provide your team with everything they need to carry out their work at home.  

For a closer look at a powerful cloud-based phone system in action, get started with a free trial of CircleLoop today.  

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If a physical relocation isn’t suitable for your small business, then consider an overhaul of your supply chain. You might be using the same suppliers and vendors now that you were years ago. Are you still getting the same value for money?  

It can take time to research alternatives and it may feel as though you’re betraying long-term business relationships, but the result can be a significant drop in costs. If you do find more cost-effective solutions elsewhere, then take these savings to your existing supply chain and negotiate a better deal. If they aren’t willing to drop prices, then you can think about taking your business elsewhere and enjoy the cut in costs.  

Next, it’s worth looking at your marketing spend. Paid social campaigns, trade show appearances, direct mail marketing and outsourced SEO work are just some of the channels you might be spending your marketing budget on. Are they all bringing in the customers to your small business?  

Conduct an audit of your marketing performance to see what’s working and what isn’t. It’s better to focus your budget on one or two areas that give you the best chance of success than spreading your budget too thin and having your message get lost in the noise.  

It’s different for each small business but you’ll know which marketing channels resonate best with your target demographic. Whether that’s through paid social media posts or radio advertising, by consolidating your marketing you can cut costs while still reaching your target audience.  

Make sure you’re aware of any financial support that might be available to your small business. There are a wide range of grants and schemes that are designed to give businesses the best possible chance of success.  

Similarly, don’t be afraid to speak to your bank. They should be able to provide support and advice when it comes to the financial aspects of your business. They deal with businesses like yours every single day and will have useful insights that can make a big difference.  

Also, don’t be afraid to seek professional advice. It can feel counterintuitive to hire a business advisor while trying to cut costs, but they’ll be able to offer unique, outsider insight into your business. Their impartial advice can make a big difference in the long run so it may be worth paying for their time and hearing what they have to say.  

When it comes to cutting small business costs, keep in mind that this isn’t something you’re going to sort in a single afternoon at the start of the month. Staying on top of your business’ finances is an ongoing process and it’s one that will need regular time and attention.  

Put aside some time each month to work on business costs. Having set time in your calendar will hopefully encourage you to work on it as if it were any other business task. Then, you can revisit costs each month to see if you’ve made the positive difference you were hoping to.