15 Simple Cost Reduction Techniques for Small Business Owners

In the previous post we showed a systematic approach you can use to reduce cost in small business while still keeping your foundation intact allowing you to take advantage of the upturn in economy when it happens. We suggested that you should take surgical knife approach to cost reduction as opposed to using machete.
By applying this approach your business may come up with tactics that will be different from some other type of business. You have to tailor the systematic approach to your business and situation. However, there are common tactics that can be employed by almost all types of businesses. Below we describe those techniques categorized by stages in the cost reduction approach.


  1. Use Skype to make domestic and international phone calls. Computer to computer phone calls are free and other rates are much lower than traditional business phone lines.
  2. Establish presence on social media sites such as Facebook and Twitter for marketing instead of spending money on traditional media (newspaper, magazine, mail).
  3. Allow employees to telecommute, where possible, instead of leasing an office space.
  4. Cut down on printing and paper based communication. Use electronic communication, including emails and text messaging.
  5. Use video conferencing services such as WebEx with clients and employees instead of spending money on travel. Make sure that the software allows you to give controls to others for screen sharing which allows for more input during e-meetings.
  6. Rent

  7. Hire temporary workers on as needed basis instead of permanent ones.
  8. Lease equipments as opposed to buying them.
  9. Utilize web based version of business software such as Quicken instead of spending money on buying them.
  10. Outsource computer maintenance for a flat monthly fee rather than hiring a full-time employee.
  11. Share

  12. Create a co-op advertisement for magazine or billboards by asking another business to share space and expense. How about pizza and movie ad!!
  13. Share office or building space with another business.
  14. Optimize

  15. Negotiate with vendors and landlords for reduced charges. After all, they are also businessmen like you and want to keep your business.
  16. Do comparison shopping and ask current service providers to match the lowest price.
  17. Reduce maintenance frequency for building, equipment, etc.
  18. Move to a small building / office space.

We are sure you will be able to come up with many more ideas in each of these categories depending on your business situation. Do let us know in comments and we will share for the benefit of small business community here.

Image Courtesy:   squeakymarmot

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  1. By applying this approach your business may come up with strategy that will be different with some other type of business. You have to tailor the systematic approach to your business and situation.

  2. Hi, we are into egg dealership/distributorship based in Laguna, Philippines. We have diversified our business into space and apartment leasing and business solutions (Internet cafe’). Due to rising costs of expenses here in the Philippines especially the electricity, fuel and manpower costs, we are deprived of procuring brand new delivery vehicles for our egg dealership. We are still using a jeepney-type model 1969. We spend money for its maintenance and repairs plus the fact of fatigue and stress of my husband as he is the one driving and getting the eggs in Batangas.

    We hope you can share tips and techniques so we can be more competitive and cost-efficient. Thank you.


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