How to Cut Business Costs in 2021

Coins, papers and a calculator used to cut business costs
  • James Notaris

    CPA, ESQ. Legal Editor

  • Steve Longo

    Executive Editor

    In Brief:

  • Due to the ongoing COVID-19 pandemic, many businesses are looking to cut costs in 2021. 

  • Businesses can save money through increasing efficiency, lowering expenditures, and embracing new tools and technology. 

  • Find some useful tips on how to cut your business costs in 2021 below!

2020 certainly proved to be a challenging year for businesses of all sizes and sectors due to the impact of the COVID-19 pandemic. Now in 2021, many firms are still grappling with the pandemic’s fallout and looking to trim their costs and increase efficiency to stay competitive in 2021. But just how should they go about that? 

We’ve put together a few tips for cutting business costs below. Take a look to see how your company can stay competitive and ultimately boost your growth in 2021!

Cut Expenditures

First and foremost, look to cut any unnecessary or pricey expenditures you can do without in the new year. 

Take a hard look at your company’s financial and insurance policies. Compare insurance costs and either sign up for a more affordable new plan or ask your current insurer if they can match their competitor’s rates. At the same time, look to consolidate insurance plans and bank accounts whenever possible in order to reduce costs. Finally, perform a cost-benefit analysis of your firm from top to bottom to see what additional and be sure to not take on unnecessary debt in 2021 to make sure your company remains on stable financial footing. 

Lower Supply and Production Costs

Another area where you can look to save money is to cut your supply and production costs where possible. 

Look outside of your traditional vendors to see if you’re able to find more affordable supplies. In addition, get creative with lowering your supply costs by doing things like selling leftover supplies to generate cash quickly, consolidating your production and reducing any wasteful or inefficient spending associated with it, reuse supplies whenever possible, and closely monitor your business’ operational efficiency. 

Alarm clock next to a stack of coins

Use Tools and Strategies to Boost Efficiency

New technology and techniques can also help to cut your expenses and boost savings. 

Use automation software to increase efficiency and cut costs, especially when it comes to things like payroll, HR, and marketing. Look to track your employees’ time usage carefully to see how you can better optimize it while scheduling meetings in predetermined blocks to make your staff’s time more efficient and organized. By keeping the focus on efficiency and effective time management, your company can lower costs and make better use of its employees’ valuable time!

Go Virtual

In 2020, the COVID-19 pandemic made remote work the norm for many companies. In 2021, keep the trend going!

By going virtual fully or at least partially, your business can dramatically reduce its office space, lowering your costs in both the short and long-term. While remote work has its drawbacks, the cost savings for many companies can definitely be worth it. 

Cut Your Business Costs Today! 

Cutting business costs can be a great way to help your business stay more competitive in 2021 and beyond. Take steps today to make your company more efficient so it can grow and thrive in the new year! 

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