Better Business Bureau offers smart strategies for business growth and cost reduction

In the dynamic world of business, finding ways to lower expenses while continuing to grow is essential for long-term success. With challenging times and many unknown factors in the economy that could impact your business and customers, I thought it would be a good time to share some practical and innovative tips to help you achieve this balance.

One significant expense for business owners is the interest on their debts. At some point, businesses will need to raise capital to expand by opening a new location, securing new inventory, or meeting new challenges. Rather than incurring more debt in these scenarios, consider a new approach through crowdfunding. This method enables you to seek funding from individuals who support your business, thereby reducing the need for conventional loans and their associated interest costs.

In some cases, reducing overhead is a great way to cut costs without sacrificing growth. One effective strategy is to adopt a hybrid or remote work approach. Downsizing office space or moving to a coworking model can save on rent and utilities. Additionally, conserving energy in your office space by switching to energy-efficient lighting and equipment can lower utility bills. Another tip is to consider buying used or leasing office equipment. Refurbished items or leasing can result in significant savings compared to buying new.

Work with new vendors or ways to keep expenses in line with existing vendors. As a business owner, you should constantly evaluate your vendor relationships to ensure you receive a good deal. To reduce wasteful spending, consider searching for vendors that offer the same supplies at a lower price. 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 can match a competitor’s pricing.

Another tool to rein in costs is by using 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, set clear expectations for your return on investment. If your advertisers are not delivering, consider different avenues. In some cases, consider allocating less money for advertising and more for community investment to foster stronger connections and local involvement.

Consider joining a trade association. Trade associations enable businesses to contribute to the local economy and reap the benefits of collaboration. Although these organizations have dues, you often save more money than you contribute. They allow you to lower your insurance bills, receive cheap phone service, reduce travel costs, and enjoy discounts on recreational activities.

Another tip that will take a little coordination but may add to your bottom line is scheduling 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 by doing this. Unless you receive discounts for early payment, hold onto your money in an account that earns interest, 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.

There are many tasks that business owners can outsource instead of hiring new staff members for roles that are small in scope. There is a robust freelance market of graphic designers, writers, and advertisers for hire, allowing you to pay for individual tasks as needed. You can also outsource 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.

You might be able to save additional money or earn discounts if you use business credit cards and bank accounts that 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 make adjustments if they can save money by transferring their accounts to another company.

Get creative and learn from other businesses. The strategies above are only the tip of the iceberg when it comes to finding new ways to cut expenses. Collaborating with other companies in your trade organization is a great way to learn about their strategies for reducing overhead. You can implement some of their strategies if they fit your business well. Remember that you can continue to grow and expand while employing your entire team and providing them with benefits and incentives.

By implementing these strategies, you can lower your expenses and continue to grow your business successfully. Stay proactive, be open to new ideas, and always look for ways to optimize your operations.

• Steve J. Bernas is president and CEO of the Better Business Bureau He can be reached at sbernas@chicago.bbb.org.