Business Money Saving Ideas – 11 Great Ways to Cut Costs
If you can cut thousands of dollars in spending at ANY time, you probably should. Due to the uncertainty in the economy, now is an even better time to look at your costs. So this post is going to walk-through some of the best business money saving ideas to cut thousands of dollars from your business.
Note: NOT everyone can / should cut these expenses. If it’s something that you love or that makes a measurable impact in your business, by all means keep it! These are just ideas. Some areas (like bringing in new leads) it’s my opinion you should actually look to SPEND MORE in. Also if you’re looking to start a business, check out this article for how to start a business with no money or experience.
1. Email Marketing Alternatives
Most freelancers don’t need a complex email marketing app. Yet, I’m willing to bet you’re paying for one. Let’s face it, they’re very expensive. I pay almost $200 a month for mine. That’s $12,000 every 5 years.The truth is even I don’t need all of the features it offers me. You can get 99% of the results with a simple email tool like Sendy. It has lists, tags, autoresponders and broadcasts. That’s pretty much all a freelancer needs from an email tool… yet instead of paying hundreds each month it’s a $59 one-time fee. Then you pay AWS to send the emails (often for about $1 per 10,000 emails).This is particularly interesting for freelancers because most ESPs aren’t designed for freelancers who only need a handful of clients to make money. Those fancy features you’re paying for aren’t for you. Sidenote: If you’re not emailing your email list NOW is the time to change that. Put at least 2 hours of writing in your calendar every week with the goal of sending the most valuable thing you can to that list of people. It’s worth it.
2. Cut Social Media
If you spend one hour on social media per weekday, that’s 240 hours per year. Multiply that by your hourly rate. Are you getting that much value from your time on Twitter and Facebook? If not, where could you spend that time instead to get more value? The potential here is pretty amazing if you think about it. Imagine how much value you could create for someone’s business if they booked 240 of your work hours. That’s how much value you can create for yourself by simply purging social media consumption. Bonus: you’ll probably feel better too!
3. Inexpensive Specialty Apps
Adobe Illustrator, Photoshop, and XD cost $39 / month or $2,340 for 5 years. But if you do primarily vector design work you can get away with just using Sketch ($99 / year) or Figma (free up to 3 projects then $12 / month). This won’t be right for everybody but worth considering in some situations.
4. Get a Contract Template
Clients are skittish right now. Protecting yourself with a contract is super important. You don’t want to have to pay back money to a client who freaks out and asks for a refund because you don’t have a contract. Getting a custom contract written by a local small business lawyer is your best option. This typically costs a couple hundred dollars, however, you can also use a boilerplate contract you find online. For these, I recommend Docsketch’s contract templates (free), Bonsai’s contract templates (free), and also the Creative Class Contract ($274).
5. Invoicing Software Alternatives
If you’re currently sending invoices through a special app like Freshbooks or Harvest you might be able to switch to Stripe and cut that bill entirely. I found invoicing in Stripe to be pretty great. The invoice happens over email and allows clients to pay via a custom payment page with a credit card or ACH or wire transfer. You can also customize each invoice, including your logo, footer, memo, due dates, and setup things like automatic check-in emails that remind clients to pay.
6. Cut the Business Cards
Whether it’s a logo, business cards, your website, freelancers (particularly designers) tend to spend a lot of time, money, and energy on their personal brand. Rarely does this pay off. The truth is clients don’t care about a freelancer’s personal brand. Save that effort and time and spend it in an area like reaching out to more clients and building your network.
7. Office Lease
If you rent out office space, now might be a good time to cut that big expense. You’ve probably been working from home for the last few weeks. Could you continue this? If not, could you work from the library or Starbucks once things got back to normal? I’ve always hated commutes, so for me working from home is a great way to save money. Think about how you can invest some of that money to make your WFH situation even more enjoyable.
8. Lower Your Credit Card / Mortgage APR
Right now most credit card companies and other lends are willing to go out of their way to help you out if you mention COVID-19. Call them up and ask. I did it and I lowered my APR by a couple percent. It took 5 minutes, and it will save me a ton of money. Simply ask them what they can do to help due to COVID-19, that’s it.
9. Website Hosting
5 years of website hosting can run you anywhere from $3,000 with something like WPEngine to $10,000 if you’re using something like Heroku. That’s a lot of money for a freelance website. The truth is there are cheap or even free options out there that you can switch to. A ServerPilot + DigitalOcean WordPress setup only costs about $100 a year. Github has free hosting which might make sense too.
10. Form Software
One free app that I’ve been loving lately is Google Forms. In fact, I’m currently in the process of moving all my forms off of Typeform and onto Google forms. That alone will save me $3,000 over 5 years. There are some features I’m giving up (like redirect on completion) however, there are numerous WordPress form plugins that can replicate this if I really need it. Happy Forms for example is a one-time $49 fee. Form software is something that I think is underused by most people, but you don’t need a fancy setup.
11. Cell Phone Service Alternative
I did this recently. I made the switch from Verizon, where I was paying $3,600 for 5 years of cell service to Ting, who I now pay $300 for the same timespan. I have great WIFI at home and send text via iMessage so I only pay for emergency phone calls when I’m out and I honestly haven’t noticed a big difference. Even kept my iPhone.
Change how you think about your costs…
Before we get to the 11 ways you can save thousands of dollars today, here’s a few tips on how to *think* about finding these expenses:
- Think about costs in 5 year increments, NOT monthly amounts.
We often think of a product or service’s price as $50 or $100 a month because that’s how we’re billed. BUT it’s very unlikely you’ll use something for just one month. Are you really going to stop sending emails or needing a website next month? No. You’ll be doing these things in your business forever. So instead of calculating the price of something in months, calculate the price over a larger timespan.
My recommendation? 5 years. With this lense, cutting even a $29 / month app is a savings of $2,000. Create a spreadsheet with all your monthly expenses and calculate the real 5 year costs of each. If an app’s 5 year number feels high, you might think about cutting it.
- Look for things that stick out as EXCEPTIONAL value
Now that you’re comparing costs more accurately, things will become clearer. Suddenly a whole new world opens up.
For example: is a $50/month app you don’t even login to REALLY worth 3x the price of a $1,000 Herman Miller chair you’ve been wanting for years and has a lifetime guarantee?Suddenly you can spend extravagantly in the areas that truly matter to you because you’ve opened up your eyes to a more accurate price comparison. It might seem odd at first but once you get used to looking at expenses this way you’re going to realize there are some HUGE bargains that you never saw before.
- Removing complexity alone can save you THOUSANDS of dollars.
Sales funnels, project management, referral agreements, processes, segmentation, website design, case studies, blogging … these are just a few areas in your business that don’t only cost a ton of money but take up a shit ton of space in your collective company’s head!
Maintenance of these things can often cost more than the payment price. Yet almost nobody calculates the maintenance cost. An app that doesn’t cost very much on the surface, might add a ton of complexity. If it has very little effect in your business (which I almost guarantee a low priced app does) it’s almost always better to get rid of it, instead of having it soak up energy and mental resources.Cutting this complexity throughout your business means REAL SAVINGS. Like hundreds of thousands of dollars in the long-run. If it’s not one of the 1 or 2 things that drive your revenue, it’s likely not worth the money or headache.
- The most expensive part of your business is often HIDDEN.
As you might have noticed from the examples above, the truth is most people don’t realize the biggest cost centers in their business. Why? Because they’re hidden. It’s not something you can plug into a spreadsheet very easily. Yet, it can sink your entire business if you’re not cautious about it.What is this mysterious factor? It’s your TIME. Spending your time ineffectively is a HUGE cost. As a freelancer you probably charge $50-$150+ per hour. It’s in your best interest to not waste that time. Look closely at your time management. If something will save you even an hour a week that represents thousands of dollars saved each year BUT beware spending that only appears to save time.
These are just some of my ideas, here’s how to find your own …
“Spend extravagantly on the things you love, and cut costs mercilessly on the things you don’t.” – Ramit Sethi
I love this quote and think it applies just as much to your business as your personal life. Running a mercilessly streamlined business with a few key tools you really love, is not only less expensive – it feels great.
If you decide to cut anything from your business today, please email me and let me know.
I read every response and I’d love to see not just what you’ve decided isn’t truly essential, but what you’re going to invest MORE in instead.
Bonus points if you answer these questions:
- Where are you spending your time in ways that aren’t creating value for your business?
- What is taking up a lot of your time? What is actually making an impact?
- What are you ignoring or spending way too little time on that could change your business?
The truth is failing to answer these questions is often the #1 cost in your business.