<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=349935452247528&amp;ev=PageView&amp;noscript=1">
Find out where you can get a Taste of TAB... our global events blast is on!

The Alternative Board Blog

5 Cost-Cutting Tips for the New Year

Jan. 3, 2022 | Posted by The Alternative Board
saving money

In 2022, businesses will continue to adapt to changing conditions in the global marketplace. But as much as things change, certain operational fundamentals remain the same. Key among those fundamentals is the need to cut expenses wherever possible without compromising customer satisfaction and the quality of products or services offered.

There are numerous ways to reduce costs that can drain a small business of opportunities for growth. Here are valuable cost-savings tips to keep in mind:

1. Look at your “geographic income statement.”

During the pandemic, many businesses made the decision to reduce operations in multiple locations or eliminate them altogether. It’s a cost-cutting approach worth pursuing in 2022, as well.

The new year is a good time to perform a “geographic income statement,” pinpointing areas where budget cuts can be made. If your analysis determines that “one area regularly outperforms another, it might be time to shut down the underperformer and focus resources where they gain the highest ROI.”

A related cost-cutting measure aims at renegotiating the terms of corporate rental space. In a time when many businesses are opting for work-from-home measures, a landlord may be more willing to strike a rental bargain that keeps everyone happy.

2. Evaluate your company’s equipment needs.

Purchasing new business-related equipment every year may be a needless expense. Alternatives to this approach include (a) leasing equipment with agreements that cover maintenance, repairs, and upgrades; and (b) getting rid of outdated software or technology that no longer serves a useful purpose.

Also, this could be a good time to consider purchasing used equipment. “Not only will this save you money but used equipment does not depreciate as fast as new items,” notes Epos Now, a cloud technology firm. When it becomes imperative to upgrade equipment, “you won’t lose as much when it comes time to sell your tools.”

3. Huddle with your vendors.

Remember, your suppliers are as eager to keep business coming in as you are. Faced with the many uncertainties in today’s market, technology vendors and others may be willing to review existing contractual agreements in your favor.

For example, suggests Minority Business Development Agency, suppliers “may have quantity discounts of 50% or more depending on the terms.” It’s possible to “get anything from an interest-free loan in the form of vendor credit to a healthy discount for paying early.” But you have to ask.

4. Consider a different method of invoicing and customer payments.

Most businesses have already incorporated electronic invoicing as part of their green initiative efforts, but if not, 2022 is the time to do so. It might also be a good idea to inform your customers that you would like to begin collecting a percentage of cash up-front with each transaction. Consider sweetening the deal by offering a significant discount in purchase price when they agree to pay cash in advance.

Also, look again at the payment plans already in place for essential services, i.e., cloud computing, bookkeeping, payroll processing, and so on. “At least once a year, review your plans to see if the level of service you pay for matches your usage,” advises Zenefits. It might turn out “you can cut back on or eliminate [some services] without hurting your business.”

Want additional insight? Best Ways to Secure Capital for Your Business now to learn more


5. Take a deeper plunge into the gig economy.

Of course, you want a core group of skilled and talented employees working solely for your business. On the other hand, there may be considerable potential savings when you tap into the thriving gig economy, where freelancers are available for a broad array of services.

Remember, freelance contributors to your business (such as content producers, IT staff, accountants, etc.) don’t incur expenses related to PTO, insurance, or retirement benefits. Think of the potential cost benefits of relying on freelancers for key services.

2022 can be a year of growth, but also a time to spend more wisely than in the past. To learn more, register for our free TAB Boss webinar, “Expert Financial Advice to Address Challenges, Seize Opportunities, and Manage Cash Flow in the Covid-19 Era.”


Read our 19 Reasons You Need a Business Owner Advisory Board


Written by The Alternative Board

Related posts

What Can Predictive Analytics Do for Your Business?
Jul. 19, 2023 | Posted by Lee Polevoi
Every business (yours included) generates a lot of data. Every customer interaction, sale, and follow-up report produce information of great potential use to the organization. The key is harnessing...
6 Top Money-Saving Tips for Business Owners
Jan. 31, 2023 | Posted by The Alternative Board
While nobody has a crystal ball, a lot of signs are pointing toward an impending recession. Consumer spending is slowing. The employment market is volatile. Inflation, while ebbing, is still rearing...
How To Create a Profit and Loss Statement
Jan. 25, 2023 | Posted by The Alternative Board
A profit and loss statement, also often referred to as an income statement, revenue statement, P&L statement, or P&L, provides business owners and potential investors a comprehensive and easy to...
5 Ways to Boost Cash Flow in 2022
Jan. 5, 2022 | Posted by The Alternative Board
We’ve said it time and again—the state of a company’s cash flow is among the most significant metrics that every CEO or business owner should track. That’s because cash flow “is a key indicator of...
Financial Reports Every Business Needs
Dec. 15, 2021 | Posted by The Alternative Board
For the smooth running of a small business, no paperwork may be more essential than financial reports. These documents inform business owners and CEOs about the success or lack of success in past...
Improving Your Accounts Receivables Process
Jan. 8, 2021 | Posted by The Alternative Board
Most businesses offer a solution to problems or otherwise fulfill a need experienced by their target audience. They can only go on doing this if—in exchange for delivering a valued good or...
Now is a Good Time to Cut Business Expenditures
Dec. 30, 2020 | Posted by The Alternative Board
In “normal” times, businesses often face the challenge of reducing expenditures while maintaining efficiency and productivity within their business operations. As we have noted before, “excessive...
The Pros and Cons of Invoice Financing
Dec. 23, 2020 | Posted by The Alternative Board
Businesses are often haunted by customers who consistently pay their invoices later than expected, or by those who don’t pay at all. A great deal of time, effort, and resources can be consumed by...
12 Ways to Make Budgeting And Forecasting Easier
Dec. 21, 2020 | Posted by The Alternative Board
Building and implementing a budgeting and forecasting process is critical to revenue growth. In today's fiercely disruptive and competitive world, the importance of such an approach cannot be...
How to Prepare Your Clients for a Price Increase
Sep. 3, 2020 | Posted by The Alternative Board
Every business must, at one point or another, share what’s viewed by customers as “unwelcome” news—the need for a price increase for products or services. Some businesses simply set the wheels in...