October 7, 2020
How to Reduce Your Business Costs
How to Reduce Your Business Cost
So you’ve heard that it “takes money to make money,” but how much money does it really take to run your business right? And how can you reduce your business costs as a small business owner so that your profits margins soar in the long run.
I know exactly what it’s like (obviously!) to run your own online business full time..
All these fees keep piling up: email marketing software, cloud storage, landing pages, website hosting, and so much more. (Checkout my favorite business tools here!) You started this business so you could have more freedom and flexibility — but you won’t ever get there if your operating expenses eat away at your profits.
A few months ago, I decided I wanted to get a clearer picture on my business expenses and where they’re coming from.
It’s tempting to stick your head in the sand and act like money magically floats in and out of your account. And whether you’re making $500 or $50,000 per month, it’s easy to let business expenses pile up without paying much attention.
No matter how much I make in my business, I want to be as profitable as possible. Profitability allows you to reinvest in your business, pay yourself, bump up your salary, hire support, save money and scale your business.
But so often in business we only focus on “making more,” not spending less. As my business grows, the more I work to lower unnecessary expenses. (Transparency note: as I’ve grown, I’ve spent WAY more on contractors, Facebook ad fees, consultants, etc. I’ve lowered my monthly expenses for business tools, resources etc. more than ever, though!)
So how can you lower your business costs?
There are 3 ways to reduce your business costs:
- Consolidate // you can get rid of tools or programs you don’t need or could go without and save. You could also see which tools have overlapping features and consolidate some of your expenses.
- Pay Upfront // when possible, pay the annual rate or pay upfront to reduce your business costs.
- Negotiate // you could negotiate charges and fees on the tools you use and love, saving monthly or annually business expenses.
In today’s post, I’ll teach you how to reduce your business costs and boost your business profits by negotiating lower fees.
So what are some things you can negotiate in your business?
There are SO many things! To me, most things in business are negotiable and can be cost saving. (Note: I don’t negotiate with small, solopreneur type businesses. That’s my personal approach. I don’t accept discounts on my legal templates or the Ultimate Bundle™ — so I don’t expect any differently from anyone else.)
Instead, you can reduce your business costs by negotiating down the rate/fee on business tools and programs like:
- Bank fees (minimum balance, checking fees, free checks, etc.)
- Bookkeeping or financial investment platform fees
- Business tools (email marketing, cloud storage, calendar tools, etc.)
- Business insurance (rates, fees, etc.)
So what does negotiating look like when it comes to reducing costs in your business? It’s not playing hardball or anything like that. It’s usually just about making the ask! But there a few key negotiating points you should know to help you reduce your business costs before I hop into a script template.
- Be polite and direct: tell them what you need and what would “get the job done” (aka., keep you as a satisfied customer).
- Each side has to feel like they’ve ‘won’ or walked away with something.
- You have the power as the customer, but you have to be willing to ‘walk away’ if things don’t work out.
- Go in educated. Know what you’re paying for, what key features you use/don’t use, and what other similar platforms charge.
- Don’t ever offer a number first. Let them come up with a number and see if it works for you. If you counter, counter lower than what you’d really settle for, and see if they’ll meet you in the middle.
OK, so now you’re ready to reduce your business expenses. You’ve also got key negotiating tips in your back pocket. So where do you start?
1 // Organize Your Costs
Create a spreadsheet of all of your monthly and annual recurring expenses. Know what those fees are, what you’re paying for, when they’re due and the interest rates. Be sure to also include charges from your business credit card, rent expense of an office space and the breakdown of money on insurance. Make a check mark next to each business tool you think you’re paying too much for (based on your research or use of the tool) or that you could negotiate a lower rate for.
Make sure there are no charges on your account that shouldn’t be there. And check if there are any tools you could go without and cancel.
2 // Contact Customer Service
Reach out to the customer service department for each business tool you want lower fees from. You want to make sure they know you’re a happy customer and your main goal would be to stay with the company — but you’d only be able to do so at a lower rate.
Here’s a sample script you can use:
“Hi there! I really love [business tool/company] and it’s helped me [what it’s helped you with in your business], however I need to reduce my business costs. If you’re able to offer me a discounted rate, I’d love to keep my account with you. What can you do to help?”
3 // Negotiate for Lower Business Costs
Now comes the fun part! Maybe they say, “Sure! Here’s a 50% off coupon for the next 3 months!” If that works for you, awesome. Take it. But if they either won’t offer you any discount or don’t come close to what you’d need, now’s the time to play ball.
Here’s where your research comes in handy. Now’s the time to explain that you’re thinking of switching to [competitor platform] because they offer a better fee, or they offer more features/services for a similar rate.
Let them respond and see what happens. If they say “they’ll see what they can do,” give them the chance to make it right. Otherwise, you can walk away.
4 // Schedule Business Costs Days
Now’s a great time to throw a few days on your calendar to remind yourself to reduce your business costs a few times per year. Whatever interval works for you (1x/quarter, 2x/year, etc.) make yourself a note to go back to your recurring expenses list and check in on discounts. So bottom line — that’s how to reduce your business costs! It really is as easy as that.
Next Step: Watch my free legal workshop
If you’re ready to legally protect your business and have the legal knowledge you need to know what to do with difficult clients, watch my free workshop ‘5 Steps to Legally Protect & Grow Your Online Business’ right now by saving your seat here.
In that workshop, you’ll learn:
- How contracts can actually save your (vegan, GF) bacon — if you have the right one.
- What your website needs to be legally protected.
- How to keep copycats off your content.
- The mindset shift you’ve got to make if you want to actually grow your business without looking over your (online) shoulder.
- The only way to form your business so that you’re personally and professionally protected.
Ready to watch? Sign up for my free legal workshop right here.
Comment below ? to let me know if this post was helpful (and if you’d like to see more business money saving tips). And if you give this a try, leave a comment below and let me know if it helped!
So What Do you think?
really really amazing! super helpful and great to see someone else teaching these things !
Thank you so much, Samantha! I’m so glad it was helpful 🙂