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How to save money in business – 5 ways that will allow your company to save money

How to save money in business – 5 ways that will allow your company to save money

So, here, we will analyze a few successful cases of how companies saved their money and got the maximum benefit.

1. Hire freelancers for project work instead of full-time employees.

Bonjoro has successfully applied this principle by actively recruiting freelancers (and emphasizing this fact). They get a number of advantages:

  • people work only when there is some work to do, the rest of the time they are not paid,
  • depending on the workload, people work 3/5/8/10/15 hours a day. Ordinary hired employees will usually work a standard 8-hour day.
  • The employer saves on costs associated with maintaining the office.
  • Taxes on this type of work will usually be much lower than in the case of full-time employees.

2. Dealers, instead of regional offices.

How can a manufacturing company distribute its products in other regions? You can either open your branches/shops/representative offices in these regions or use the services of a dealer. Surely, from the point of view of service quality, it would be preferable to open a regional representative office, because corporate standards of quality can be fully implemented, but what if your company is small or medium and you don’t have the funds to open such a representative office? At this stage, dealers who have their own customer base, their own infrastructure, and their own people will help you. Such a scheme was used at the early stages by the Ukrainian manufacturer of security and fire alarm systems, Tiras LTD. This allowed saving money while presenting products in the regions.

3. Rent but not buy any property.

This is a typical story for any startup. There are many examples of how a successful business was created from scratch. In the first step, you need not offices, warehouses, transport, etc. but a good idea and a small capital. There is no need to invest in the purchase of expensive things until your business brings a stable, more or less predicted profit. It is better to save money at this stage and rent all the things you need.

4. Use free software instead of popular.

An office needs certain software, OS, and other things. This is perhaps the universal advice for all startups. Using products such as OpenOffice instead of MS Office, or Linux instead of Windows will save a decent amount, which you can spend on other things at the first stage.

5. Ask for the best proposal from your suppliers.

You may fall into the misconception that tariffs for regular expenses of a company, such as those in bills for telephone services, or electricity cannot be reduced by discussing them with your supplier in advance. In many cases, this is not true. For example, Mr. Lee Prosenyak, the head of Cherry Creek Dance in Denver, once decided to try to negotiate lower rates with his communication provider. To his surprise, he managed to achieve a positive effect just in 2 minutes of talking over the phone! He did the same with other suppliers of goods and services. This saved up to $1.6 million per year for the entire company. Even if you do not manage to negotiate a reduction in the cost of delivery, you risk nothing.

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