Money is an important part of opening and running a business. Without it, you’re unable to reach the level of success that you’re working hard to reach. Whether it’s cutting down the amount you’re spending or reinvesting funds into your business, there are many reasons why business cost savings are crucial.

How small changes have a big impact

In their first year of doing business, entrepreneurs tend to spend double than what they had anticipated. You may be wondering why these financial realities are far from initial expectations. Is it because of overspending, or did the forecasts go wrong?

Owners and managers actually make common yet avoidable mistakes in their small business budgeting and accounting. To help you avoid these same missteps, there are simple cost-cutting strategies to implement while we’re still in the first half of 2023.

Outsource non-core functions

In our digitally-driven era, offshoring is possible from any internet-connected location and in nearly every kind of industry. Some of the processes that are increasingly being outsourced are general administration, marketing, IT, and HR management. Management is kept in-house but lower level work is being outsourced more often.

Why outsourcing non-core functions works

• It transfers the risks involved in these business functions
• It reduces the costs of owning infrastructure and equipment
• It allows your team to focus on the core competencies
• It helps you hire remote staff who specialise in such tasks
• It boosts the customer experience and turn-around time
• It enables you to gain an edge over your competitors

How to identify functions to outsource

Determining which tasks to outsource or not is burdensome for some leaders. This is especially true when you’re used to doing them yourself. To give you an idea when to tackle it internally or arrange for staffing and recruiting, consider these factors:

Additional expertise: Marketing is one area that many organisations are outsourcing as they scale. This is because offshoring allows them to take advantage of knowledge and skills they don’t have internally.

Temporary increase: Perhaps your business has taken on a new customer on a short-term contract. It doesn’t make sense to hire full-time employees to handle the additional workload.

Lack of time: Instead of stretching your existing workers too thinly, it’s better to utilise the resources of external firms. This is particularly useful for small businesses to compete with bigger corporations.

Business expense reduction: Note that there’s a difference between business cost savings and cutting corners. Outsourcing is for reducing overhead without affecting the quality of your products and services.

Vendor negotiations: Make sure you’re familiar with the online hiring agency before putting your trust on them. Check that they’re open to discussing terms and preferences rather than choosing for you.

Which companies are successfully outsourcing

AppSumo

Noah Kagan founded AppSumo, a site offering daily deals, after his stint at Facebook and Mint.com. He outsourced the web development needs of his company to a skilled developer for only 50USD. Also, Imgur outsourced him to sell their Pro accounts on Reddit.

Procter and Gamble

P&G has always been an innovation-driven organisation, which is why they outsource their data center operations, IT support, and IT apps development to HP. Meanwhile, their travel, expatriate, and payroll services are left to IBM and their building management to JLL.

The Coca-Cola Company

The reason why Coca-Cola is present in over 200 countries is because the Coca-Cola System is based around outsourcing. Asa Candler, then chairman in 1899, handed over the bottling rights to another company while maintaining the rights to the syrup. They currently partner with over 200 bottling companies around the world.

Invest in AI and automation

If you’re interested in scaling your business, it’s important to stay updated with the latest technology. You might think that implementing automation and AI is an additional optional expense but you’re mistaken. Artificial intelligence helps companies of any size and industry in reducing costs too.

Why automation and AI works

• It allows you to offer around-the-clock customer service and support
• It automates your staffing hiring by screening candidates better
• It detects and reacts to potential threats and attacks to your network
• It cuts time spent on responding to instant messages and emails
• It informs your team what customers want to foster good relations
• It tracks leads and pushes clients through the sales funnel efficiently

How to identify tasks to automate

What stops many companies from implementing artificial intelligence in the workplace is knowing where to start. If you’re not familiar with the thought process, you’ll see that deciding tasks to automate isn’t as simple or straightforward as some make it out to be.

Return on automation: Begin automating where there’s an immediate impact and return on your investment. If you’re bringing in sales, consider automating your leads for a consistent stream into your funnel.

Necessity: If a task isn’t needed to proceed within your system, forget about automating it. Go for processes that positively affect your ability to produce money in any capacity.

Recurrence: When a task is required but not repeatable, automation mustn’t be the focus. Instead, perform and document it until you’re sure it’s recurring at a faster and more accurate rate.

Profitability: After checking that a process is required and recurring, determine if it’s profitable. Anything that doesn’t contribute or generate revenue doesn’t have to be automated.

Which companies use automation and AI

Unilever

This multinational consumer goods company applies AI and automation in several business functions, including recruitment. They saved 1 million GBP in one year as well as cut up to 90% of time to hire. This was achieved through natural language processing (NLP) and machine learning algorithms.

Alphabet

The parent company of Google also runs a self-driving technology division called Waymo. It currently shuttles riders around California on its autonomous vehicles. Alphabet’s acquisition of DeepMind also speaks of the company’s commitment to deep learning.

IBM

Considered a leader in the artificial intelligence sphere, IBM produced the Deep Blue computer that defeated a human world chess champion. Their latest AI accomplishment is the Project Debater, which is a cognitive computing engine that formulates human-like arguments.

Embrace remote work

Allowing your employees to work from home or from an offshore location reduces overhead costs, including office space, utilities, and supplies. In addition, studies show that online assistants are often more productive and have higher job satisfaction.

Why remote teams work

• It gives you access to workers who go above and beyond their job descriptions
• It enables your workers to extend their hours without worry about commute
• It provides more opportunities to connect with peers and co-workers professionally
• It leads to greater job satisfaction in employees thereby boosting retention
• It allows you to start more projects because virtual assistants get more done
• It spares you from the costs of additional working space and equipment

How to identify remote work readiness

Working remotely become more commonplace when the coronavirus struck. Some organisations were quick to adapt to a virtual workplace but others remained office-based. If your company is yet to implement remote work, here’s how to tell that it’s ready to make the shift:

Hybrid implementation: See if your employees are already performing tasks remotely. They might be working in the office in the morning then working from a coffee shop in the afternoons, for instance.

Night shift: When you’ve been thinking of hiring an administrative assistant who works around the clock, you may as well pick someone who is offshore for your convenience and their comfort.

Competitive edge: There’s a good chance that your competitors have already established remote work policies. Keep them from stealing top talents by implementing your own.

Office scaling: If your operations have been growing steadily, this means you’ll be recruiting additional staff to keep up with the workload. A remote assistant is more affordable since they don’t need equipment or space.

Technology integration: Look at the software you’re currently using if they’re cloud-based or internet-connected. With remote work apps ready, you simply need the people to use them.

Which companies are fully remote

Airbnb

Here’s a company that was founded to connect travellers searching for clean and safe accommodations with people renting out their extra properties. They announced last April 2022 that they were designing for employees to live and work from anywhere in the world.

Adobe

The creators of Photoshop developed a new app which enables teams and individual employees to stay connected no matter where they are based. Due to their people-centric culture, they plan to gather either physically or digitally during moments that matter.

Spotify

The music streaming service launched their Work From Anywhere program back in February 2021. It offers hybrid, in-person, and remote working options for their workers along with flexible living choices in case an employee wants to relocate for their job.

Streamline your processes

One of the best ways to save time and money is by process streamlining. This is done by automating repetitive tasks, reducing mundane activities, and creating new ones to maximise efficiency. All of these lead to better environments for both clients and workers.

Why streamlining processes works

• It helps you notice missed deadlines, mistakes, regulation compliance, and obligations faster
• It provides you with buffer-time in between tasks thereby allowing better time management
• It improves communication between different departments or teams boosting collaboration
• It pushes for greater productivity as workers have more accurate ideas of your expectations
• It encourages you to have a paperless office so you’re saving the planet at the same time
• It enables you to focus on specific sectors to grow in your business to increase bottom line

How to identify processes to streamline

Process streamlining means removing redundancies while optimising resource utilisation. It’s the most effective way to boost profits while improving operations. It includes leveraging automation and artificial intelligence to replace manual labour.

Visual mapping: Thoroughly analyse or dissect a process before you think about streamlining it. If you notice your team working harder on certain days of the month, they may be following an outdated procedure.

Custom solutions: Managers and entrepreneurs often make the mistake of investing or buying applications first then trying to fit them to problematic processes when it should be the opposite.

Long run: Total implementation of process streamlining might take over a year so think about the long-term effects and plan accordingly. Leave room for growth or modifications especially in 5 or 10-year plans.

Ready-made options: You’d be surprised to learn how many technologies are available for streamlining workflows and business processes so be sure to do your homework.

Which companies are successfully process streamlining

Netka System

A provider of IT solutions that support businesses in achieving digital transformation. Netka built strategic partnerships to streamline their product development process through the help of Gartner. They are navigating Thailand’s economic recession by sustaining and driving more business.

Gold Coast University Hospital

Through the installation of the Patient Journey Solution by NEXA, this Australian hospital is streamlining their services to become a world-class healthcare facility. They are managing the existing demand and growth for services with audit ability, accountability, visibility, report ability, and historical data in mind.

Streamline Industries

Despite their name, this company struggled to meet commitments for on-time deliveries. This was because production managers had to juggle multiple projects with different levels of urgency. LillyWorks PFM introduced a new way of job scheduling through real-time prioritisation.

Switch to cloud-based software

Using cloud-based software and services saves your business money on hardware, maintenance, and upgrades. Cloud-based software also allows for more collaboration and remote access. Though implementation gets complicated, it provides extensive benefits in financial efficiency.

Why cloud computing works

• It lets you pick between private and public clouds according to your budget
• It reduces the amount of hardware your organisation actually needs
• It lessens the need for labour and maintenance including in-house IT staff
• It reduces the installation time therefore allowing more time for working
• It asks for lower investment of initial capital compared to standard solutions
• It provides on-demand services meaning you only pay for what you use

How to identify cloud computing readiness

Although cloud-based software has been around for decades, its popularity is soaring these days. This trend is expected to continue but how do you know that your company or team is ready? Here are some factors to consider when moving to the cloud:

Additional storage: If you’re running out of storage on your existing server, you may be thinking of upgrading or adding new ones. It’s a great time to invest in cloud storage which is accessible anywhere with internet.

Remote work: Whether you have a hybrid or fully remote arrangement, support your workers by providing them with cloud services. This enables team to blend remote and office work easily.

File sharing: The paperless office is trending amongst many industries in recent years. Rather than printing and mailing documents, share them conveniently through the cloud.

Tight budget: Physical servers are costly, especially when you consider the people who’ll be maintaining them. Cloud services are sometimes free like with Google or have affordable premiums.

Multiple applications: Though you might have a complicated application infrastructure, it’s highly recommended that you move it to the cloud for added security and convenience.

Which companies use cloud-based software

Etsy

This popular e-commerce website is a marketplace for sellers and crafters around the world. It moved its data centers and platform to Google Cloud, which enabled it to create new solutions for its users. Cloud technology helps it manage thousands of sales transactions daily.

Netflix

What started out as a DVD rental business has become a streaming service that utilises cloud services. Due to its big user base, it found in-house data centers to be inefficient. AWS accommodates its need for fast scaling, proper infrastructure, and continuous innovation.

Apple

The development of Siri is proof of how this technology giant is maximising the cloud. When users ask inquiries, Siri accesses the cloud for data before it responds to them. Their cloud program, iCloud, also allows users to exchange upgrades, apps, and data without modifying their software or hardware.

Parting thoughts

With a world that’s still adjusting to life after COVID-19, every business owner is searching for ways to boost profits and efficiency while saving money. The good news is that you don’t need to make major changes in your company for business expense reduction. Start with making minor changes to your small business budgeting.

Rather than the obvious ones found in traditional books, try the creative ways we’ve discussed above and see how they work for you. If you’re particularly interested in outsourcing non-core functions and embracing remote work, Remote Workmate is the right place for you.

When you’re ready for outsourcing HR, click the button below to begin your recruitment journey.