This is a fairly generic question, not specific to any particular business type, so any answer must be fairly generic as well, applicable to businesses in general.
One way for businesses to reduce operational costs and save time in the process is to contract out. There are plenty of third-party contractors that can do a great job with many of the operational functions of a business saving the owners time and money. Saving time in allowing owners to concentrate on other important aspects of running the business instead of managing these tasks; and saving money in that contractors are not paid benefits, which is the case with hired employees. Salary expense is most often the biggest expense of a business. The employer’s portion of SSI alone is 7.5% of gross salaries paid to employees. Additionally, payroll benefits including medical insurance, retirement, vacation time, etc., are costly. Opting to contract out instead of hiring staff will save these costs, which savings will usually be in excess of the contractor’s fee. IS and IT, janitorial, maintenance, landscaping, printing, mailing, delivery are all examples of functions that can be contracted out. There are many more.
Another way to reduce salary expense is to convert part-time salaried employees to hourly on-call. Affected employees would still be able to work the same number of hours a week, unless you don’t need them to. You have more control of your biggest expense. Expense control is the most important aspect of running a business.
A third suggestion would be to convert traditional forms of advertising to internet advertising. Using the internet to advertise is more effective, reaches a bigger market, and is generally much less expensive than traditional forms of advertising. There are more consumers surfing the internet at any one time of the day or night than there are listening to the radio, reading the paper, or even watching TV (and probably more than all of those combined). Figure out an effective and expedient method of distributing your product or service long distances and by using the internet you’ve expanded your market from a local one to a global one (yet this speaks to the other way of improving the bottom line: increasing income).
One often overlooked expense that can represent a big chunk of the budget is utilities. Operational costs include the cost of utilities you use while operating the business. Electrical, water and sewer, natural gas, and even cable and internet providers. Shop them all. Conserve. Focus in on this very taken-for-granted expense. If it seems hard to control that’s only because monitoring usage is routinely neglected. It’s actually a very controllable expense and is done so by installing energy-saving devices, keeping maintenance current, and creating office policy regarding its usage. Owners are surprised and often shocked by how much they can save by paying attention.
Lastly, and maybe most importantly, look at your debt service and/or lease expense. Restructuring debt can often save, especially in markets when rates are declining, like this one. Reducing rates on debt will have a big effect on the bottom line. Check with your banker and let him/her know that you’re perfectly willing to shop for banking services and interest rates, if necessary. You may be surprised what your bank will do to keep your accounts in place. If you lease space, don’t let your landlord get away with thinking that a move is not an option for you. In markets where the cost of leasing space is going down, negotiate a reduction to your lease payment or shop for space. If you lease furniture or equipment, do the same thing: shop. If you can find a better deal, give your lessor a chance to match it. They usually will. Shopping can be the most productive use of your time when it results in reduced expense.