At the beginning of the business journey, most startups have the same priority: to grow. Realistically speaking, however, growth often requires money and it’s not all the time that an angel investor comes out of the woodwork to get the company going.

As startups and small businesses don’t always have budgets to allow for huge expenses upfront, it’s important to keep costs at a minimum. A lack of cash flow may adversely affect employee pay, among other factors, which in turn impacts the quality of work or can lead to a backlog in orders.

Straightforward Ways to Cut Down on Costs for Your Small Business

We have created a list of some straightforward ways you can cut down on costs for your startup, without disrupting mission-critical activities, compromising the quality of work you produce or completely crippling your company’s growth.

Reducing Utilities and Overhead Costs

Power down appliances and equipment after hours

This can’t get any more straightforward: turn off any nonessential appliances or machinery after hours and unplug them if possible.

In most offices, computers consume the most energy. Have everyone make a habit of powering computers down before heading out and turn off the lights before leaving. For restaurants and other facilities that don’t operate overnight, power off items that are not used for safety or storage.

Cut down on paper use

Reducing the paper waste your organization produces is good both for the bottom line and the environment. Here are ways your company can reduce paper waste:

  • Use both sides of the paper when printing and copying
  • Reuse waste paper for notes or scratch
  • Forgo traditional courier services for secure electronic file exchange systems
  • For printed reports, reduce the font size and tighten margins
  • Whenever legally possible, take your organization’s name off of direct mailing lists
  • Inform service providers and other sources of direct mail, when an employee no longer works for your company

Adopt passive energy-saving measures

Reduce your carbon footprint and the strain on your lighting and climate control systems by implementing:

Tight-Seal Windows and Doors: If you work in older buildings, you’re likely to identify door and exterior window frames, air vents, and utility line entries as common heat loss points. Weather-strip and caulk these areas to seal off air leaks. For smaller spaces, this project would cost only about $30, with some material left over.

Install Double-Paned Windows: If you’re willing to shell out a little bit of cash, consider replacing your single-paned windows with double-paned ones. Double-paned windows provide more insulation and while they may be expensive, they tend to last a long time and will likely to pay for themselves within a couple of years at the most.

Before you take on bigger energy-saving projects (such as a solar water heater), find out if it meets the requirements for local, state, or federal energy-efficiency tax credits. Often, insulation, small-scale renewable projects, and energy-sipping appliances can help you qualify for rebates.

Review service usage and cost

Your business may be paying for a lot of services including telecommunications, bookkeeping, cloud storage, or even legal services, through monthly or annual plans. You should review these plans at least once a year to determine if they still address the needs of your growing company.

Annual plan reviews let you spot whether you’re paying for a capacity that you don’t need (and therefore don’t use). If this is the case, you can downsize to a more affordable plan without affecting business operations.

Conversely, if you find that you constantly exceed your current plan’s limits, it’s possible that you’re paying a considerable sum to run over those limits. Your mobile carrier, for example, may charge $15 for every gigabyte beyond your data plan’s limit. By choosing a plan with more capacity, you might save hundreds of dollars in the long run.

Allow employees to work from home


Telecommuting offers startups tremendous cost-cutting potential. This potential, however, remains largely untapped.

A Global Workplace Analytics report says that half of the U.S. workforce holds a job that’s “telework-compatible.” About 80%-90% of American workers, however, say they want to be able to work from home at least some of the time, but only 20%-25% do so.

Telecommuting and other types of flexible work arrangements can have positive effects on job satisfaction and employee morale – two factors that are positively related to productivity.

Work-from-home setups directly impact companies’ and employees’ bottom lines by:

  • Reducing your employees’ commuting costs
  • Reducing time lost to travel and commute
  • Reducing your utility costs by cutting down on water and electricity usage
  • Reducing the space needed to house employees (This benefits you in multiple ways. You may, for example, install collaborative workstations instead of dedicated desks. This way, you can expand without needing to rent a bigger office or accommodate home-based employees when they visit the office without spending on additional furniture.)

Use your office space more efficiently

Great news for rent conscious executives and business owners: you can reduce your carbon footprint (and expenses) per employee by integrating collaborative workstations and multipurpose rooms, such as a pantry that doubles as a break room. This works even better for employers who allow telecommuting.

By redesigning your office around space-efficient principles, you can do more with less space.

Make fair yet sensible changes to healthcare

There are ways you can reduce your share of healthcare costs, while still being able to provide for your employees’ healthcare needs and without resorting to drastic measures such as unceremoniously cutting their coverage.

Maximize tax-advantaged health savings accounts that empower your employees to take ownership of their healthcare choices as they shift the cost and risk away from you. Combine these with high-deductible health insurance plans that address catastrophic expenses to come up with a suitable replacement for traditional health insurance plans.

Productivity and Human Resources

Discourage procrastination and promote effective time management

Procrastination comes in many innocuous forms: it could be as small an action as stopping by a coworker’s station for non-work-related chitchat, or as tricky as sneaking out of the office for hours at a time to attend to personal errands.

Take note that in some cases, inefficiency doesn’t have a human cause. Sometimes the culprit could be poor communication systems or outmoded management practices, for example. If you see that chronic procrastination is beginning to affect your processes in the office, get to the root of the problem so you can take appropriate steps to address it.

If your employees report that they feel overwhelmed working on huge tasks at once, for instance, try breaking these tasks into a series of smaller tasks. You may also implement systems that hold everyone accountable, like time-tracking systems that benchmark the timeframe required for the completion of certain tasks.

Hire freelancers for non-core work

Freelancers are cheaper to keep compared to traditional employees. They don’t expect you to provide them with healthcare benefits, paid time-off, pre-tax retirement accounts, or other costly benefits. They only expect you to pay them for completed work.

When hiring independent contractors and freelancers, however, it’s important to have an enforceable contract that sets expectations and mitigates risk for both parties. Remember not to over-rely on freelancers, as they’re less likely to be loyal and may have other matters on their plate that may distract them from the work they do for your company.

By limiting freelance work to one-off projects and non-core activities, you get to keep your labor costs under control, without worrying about the risks.

Invest in your employees


It’s true that hiring employees, especially those with specialized knowledge or in-demand skills can be costly, but hiring replacements is just as expensive – if not more.  The Center for American Progress reports that replacing a regular employee can set you back about 20% of the employee’s annual salary in recruitment and on-boarding expenses. Other studies even suggest that 20% is a conservative estimate. With this in mind, it’s smart to focus your efforts on retaining talented employees.

Promotions and Advertising

Leverage social media advertising

Paid social media advertising offers a much cheaper alternative to traditional advertising. Ad Espresso, for example, points out that the average cost per thousand (CPM) for a U.S. Facebook ad in 2017 was $7.19. This means you pay less than eight dollars — less than a third of the cost of a spot on prime-time TV — to expose your ad to a thousand people.  What’s more, social media ads are less costly to produce. You can go for quality videos on Facebook or Twitter, or ride the tide with a witty and catchy meme.

If you can get your team and your business’ social media fans to engage with your posts, you don’t even have to pay for social media advertising. You can organically build your following and tap into thousands of potential customers, and not a single marketing dollar spent.

Encourage word-of-mouth marketing

Organic social media engagement is one form of word-of-mouth marketing, but you can explore other ways to outsource part of your marketing tasks to your customers – at no cost.

You may integrate referral programs that reward your existing customers when they bring new business to you. You can also build brand ambassador programs that incentivize influencers for being your brand evangelists and for tapping into their following to champion your brand.  When creating your organization’s ideal word-of-mouth marketing strategy, remember to factor in your audience’s demographic makeup, their buying habits, and how they respond to various ad formats, messaging, and sales efforts.


Buy (gently) used equipment

There’s no rule anywhere that states you must only buy shiny new equipment for your office, so why not go for gently used items? Depending on what your company does, your pre-owned purchases may include:

  • Furniture
  • Cutlery and glassware
  • Storage equipment such as bins and liquid vats
  • Office technology such as keyboards, printers, and copiers
  • Personal technology such as refurbished laptops, smartphones, and tablets
  • Vehicles such as company cars and delivery vans

Use high-tech alternatives to legacy systems

Look around your office. How many legacy systems do you see?

Depending on what your business does, you’re likely to still be using legacy systems. If you run a light industrial company or a manufacturing company, for example, you’re more likely to still be using dozens of old machines that you might not want.

If your business runs in an office setting, the drag from being stuck with legacy systems may be less obvious—but that doesn’t mean they don’t affect your processes. Your fax machine, for example, may still be useful in sending documents to some vendors, but it may be keeping you from doing business with agencies that rely on cloud-sharing technologies. Similarly, your landline phone service may still be serving you well, but it may not be the most cost-effective option when communicating with partners and customers from a different (or overseas) location.

Moving from legacy system to high-tech alternatives, however, can boost productivity and reduce costs in the long run. It can even pave the way for partnerships with bigger prospects, and ultimately, scalability.

Leaving Your Legacy Systems? Turn to Lingo

Cut costs and streamline the way your organization communicates with help from Lingo. Lingo business solutions offer startups several cost-saving options catered to their business needs including a new generation Voice over IP (VoIP), Hosted PBX, cellular, and traditional voice phone systems. At Lingo, we understand that a small-to-medium company needs to focus on business growth and not unreliable service. We are confident that our product lineup, industry-leading features, and improved call quality offer customers a dependable voice solution at an affordable price.

This means our VoIP solutions allow you to upgrade your SMB’s communication systems without the expensive on-site hardware installation. Lingo lets you expand your communications, minus the additional setup costs.

Talk to us about integrating VoIP solutions into your communications. We offer affordable monthly plan rates and options for unlimited domestic and international calling. Contact Lingo today!