There’s almost nothing business leaders across the board can agree on.
Think everyone loves agile? The waterfall method still has its fans. Is remote work the future? Maybe. Surely employee training is worth investing in, right? Some even say “no” to that.
There’s one thing, however, that every businessperson likes: getting more for less money. Reducing costs without curtailing a company’s ability to provide its products or services is something no board member, executive, or manager would refuse. And while it might sound too good to be true, there are a surprising number of ways that firms large and small can cut down on their everyday expenses.
1. Give independent contractors a try.
As business leaders are all too aware, employees are expensive. Beyond wages, payroll taxes, unemployment insurance, workers’ compensation, disability, vacation days, and more eat into the company budget. But because employers only pay independent contractors for their time, they can save up to 30 percent of what they’d have to pay a full-time employee for the same work.
To spot opportunities for independent contracting, think about specific tasks that can be purchased externally. With 36 percent of the U.S. workforce freelancing, it’s possible to outsource almost all of them. Writing, driving, design, and software development are common contractor roles, but plenty of out-of-the-box responsibilities can be contracted as well. According to a Mavenlink survey, 47 percent of executives consider contingent workers for management and even C-suite roles.
2. Join a group purchasing organization.
It may sound too good to be true, but GPOs provide members with the same products they’d otherwise order themselves — only at lower costs. A model pioneered more than a century ago by U.S. hospitals, GPOs leverage the buying power of their members to negotiate better rates on common goods. Unlike a century ago, however, GPOs now serve every industry imaginable.
Because of the scale and process improvements GPOs offer, they can cut operational expenses for their members between 15 and 20 percent, according to Anthony Clervi, president and CEO of UNA, a fast growing GPO. “Almost anything a business could need, GPOs can get for a better price,” Clervi says. “Think printers, computers, company cars, desks, stationary, and even cleaning supplies.” To maximize their savings, Clervi suggests choosing a GPO that recoups costs from the suppliers it partners with rather than charge members a service fee.
3. Consider co-working spaces.
The average rent per square foot in New York City is $74 per square foot. In other words, a business in America’s largest city could expect to rent just 811 square feet with $5,000 per month. For that same $5,000, a company could buy nearly 17 desk spaces at Brooklyn’s WeWork location.
While co-working spaces might sound like they’d be dominated by self-employed individuals and startups, many have found friends in the enterprise. Verizon, IBM, and Microsoft are all investing in co-working, hoping to rub elbows with entrepreneurs and provide workers with greater flexibility.
Companies today may not have a lot in common, but every business could use a break on its expenses. While enterprises, in particular, can’t cut their budget overnight, they can find savings in a surprising number of nooks and crannies. A discounted computer here and a payroll cut there may seem like small savings, but they make a dent. On that point, too, leaders agree: Over time, small dents can make a big difference.