BBB tips to cutting costs for business

When the topic of cost reduction arises in business discussions, it may conjure images of workforce downsizing.

However, it’s important to recognize that small businesses have a plethora of strategies at their disposal to simultaneously drive expansion and decrease overhead costs.

Networking is a low-cost option that may help you develop many relationships and introduce you to people who may become your customers or even lower cost vendors for your business.

As a business owner, you should constantly evaluate your vendor relationships to ensure you receive a good deal. If you want to cut wasteful spending, try looking around for vendors who offer the same supplies for a discount.

Some business owners stick with their vendors because they have rapport, despite paying more than needed. You can reduce costs with your current vendor by renegotiating your contract to see if they match a competitor’s pricing.

You may join business organizations and build relationships to lower your insurance bills, receive cheap phone service, reduce travel costs, and enjoy discounts on recreational activities.

You might also meet people who can help or guide you to more streamlined marketing methods. Take the time to analyze the effectiveness of your marketing strategy. Is it driving new sales, or are you simply throwing money at advertising campaigns that fail to deliver? If so, you can save money by eliminating advertising methods that aren’t working for your business.

Every time you invest in advertising, you should set clear expectations for return on your investment. If your advertisers are not delivering, consider different and less expensive types of campaigns or work with other advertising companies.

Also consider taking the time to schedule your payments for maximum efficiency.

You might think paying your bills early is the responsible decision to get the task out of the way and prove that you are a reliable debtor. However, you may be leaving money on the table when you do this.

Unless you receive discounts for early payment, you should hold onto your money in an account that receives interest instead and then pay your bills when they are due, no sooner. Alternatively, you can negotiate with your lenders to give you a slight discount if you pay early. In this scenario, you would benefit from paying your bills before they are due.

Also there may be ways to save money on your credit cards and bank accounts.

Business credit cards and bank accounts offer attractive rates and benefits for business owners. These perks may include cash back, airline miles, reduced interest rates, and rewards for maintaining a balance or meeting spending criteria.

Smart business owners should regularly evaluate whether they have the best deals on their accounts and be willing to change things up if they can save money by moving their accounts to another company.

There are ways to keep your full staff while possibly using creative outsourcing instead of hiring new staff members for roles that are small in scope. There is a robust freelance market including graphic designers, marketers, and functions such as accounting, human resources, and more.

Consider whether you would benefit from outsourcing a project or role before onboarding another employee for whom you must provide salary and benefits.

The strategies above are only the tip of the iceberg when finding new ways to cut expenses. Remember that you can continue to grow and expand while employing your entire team and providing them with benefits and incentives.

• Steve J. Bernas is president and CEO of the BBB of Chicago & Northern Illinois. He can be reached at sbernas@chicago.bbb.org