1.Alternate advertising: Heavy expenditure is incurred by business firms on advertising. Through alternate means of advertising this cost can be reduced to bare minimum. Social media platforms like Facebook and Instagram can be used as effective means of interactive advertising. Products can be advertised through collaborations with brand specific blogs and youtube channels.
For example: Approaching Fashion Bloggers and youtubers to advertise latest beauty care products and fashion trends.
2.Reducing permanent staff: Employing permanent staff adds to the total fixed cost incurred by the firm. If the size of permanent staff is limited, then the wage bill can be reduced. Employing freelance employees or interns for seasonal works or outsourcing seasonal work to agencies when required is a viable strategy.
For example: websites like Internshala, freelancer, linkedin, letsinterns etc can help you hire employees for short term.
3.Outsourcing: Big firms who are running short of funds can outsource certain departments such as customer care, marketing, designing etc. to other firms or consultants outside to avail the service at a much lower price.
4.Small things matter: Going paperless, recycling, selling scrap or second hand computers and furniture can save some precious bucks. Reducing electricity wastage, making maximum use of natural light in the office and using cloud storage for record keeping are few ways of cutting down small expenditures that can cause a difference in offices where capital is short. It can be beneficial in the long run.
5.Get techy: Harnessing technology can reduce expenditure significantly. Using email, video conferencing and file sharing can save money spent on avoidable business trips. Using customized software to maintain records and accounts can save salaries of a few employees.
6.Repair instead of replacing: Purchasing new office equipments such as computers and other electronics and even office furniture is a big part of the firm’s expenditure. Instead of replacing items that are not heavily damaged or totally worn out, repairing them is a better option for any business which aims to cut costs.
7.Bulk is good: Bulk production reduces the marginal cost considerably while the price remains the same, this increases the profit margin of the firm better returns directly imply better growth for the business. Bulk production requires capital initially but once the production line is up and running cost minimization is drastic.
8.Long term contracts: Vendor, sellers and suppliers are more often than not willing to enter in long term binding contracts for lesser monetary consideration. Long term contracts cost the firm much lesser than the expenditure they would incur if they have short term based or order based contracts.
9.Employee retention: Retaining employees for long term saves the company training cost, cost incurred while giving the joining bonus, cost of conducting the recruitment drive etc.
10.Inventory management: Managing inventory on the basis of demand can help cut costs of stocking the inventory. It will also make accounting of stock easier and the cost incurred due to damage of stock due to its storage beyond the shelf life will be completely nullified.