Six entrepreneurs share smart tips for trimming operation costs.
February 4, 2019 3 min read
This story appears in the January 2019 issue of Entrepreneur. Subscribe »
1. Learn something new.
“I love to work with other creative professionals who are excited about the brand and are willing to collaborate within my budget, but I’ve also found that educating myself has helped cut costs tremendously. I take advantage of online learning resources such as Skillshare and Lynda.com to brush up on design techniques and other areas of
my business.” — Victoria Ashley, founder and CEO, Laundry Day
2. Spend smarter.
“When we have had to cut costs, we went line item by line item in our P&L and cut anything that wasn’t necessary. We cut marketing spend with more than a nine-month payback, unnecessary travel, and legal expenses where we could, and we downsized our office and moved into a WeWork, which turned out to be cost-saving and something our team loves.” — Lindsey andrews, cofounder and co-CEO, Minibar Delivery
Related: 7 Ways Entrepreneurs Can Invest in Themselves
3. Do more with less.
“Last year we went through a cost-cutting exercise with our tasting room operation to bring it to profitability in a challenging regulatory environment. Rather than cutting staff, we used existing staff in more effective ways. An outside cleaning service was eliminated and replaced with increased staff hours. And labor needs in the production operation — labeling and filling bottles — were covered with increased hours from tasting-room staff.” — Gareth Moore, CEO, Virginia Distillery Company
4. Find the waste.
“The answer is easier than you may think, and it starts with cleaning out your closet. You’ve likely accumulated a number of tools, applications, and systems you no longer use or need. Turn some of them off, merge the ones you can, and get rid of what’s collecting dust. You’ll be surprised how little will change outside of saving some money
in license fees.” — Tom Buiocchi, CEO, ServiceChannel
Related: If Growing Your Business Isn’t Growing Your Profits, It’s Time to Stop
5. Raise (some) prices.
“In today’s market, you’re dealing with increased labor costs, tariffs, and potential increases in cost of goods. But one thing within your control is what you charge for your products or services. We spend a lot of time figuring out how to maximize pricing as a revenue generator, which ultimately reduces costs since we’re charging more for the same amount of work. The key is to pick a few items that have the biggest impact on sales without upsetting our customer.” — Glen Johnson, multi-unit franchise owner, Tropical Smoothie Cafe
6. Trust your team.
“It’s easier to train someone to be better than to hire and train a new staff member. Rather than cutting staff to reduce costs, I try to redirect my staff to improve inefficient parts of the business. Responsibility is empowering, so I give them a goal, a budget, and a to-do list, and I put them in charge of increasing efficiencies.” — Amber Jacobsen, cofounder and director, Toby’s Estate
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