Small businesses are the underdog in any industry. In Australia, only 66 percent of new small businesses make it past their first year of operation. Out of those remaining businesses, only half will survive their second year. And out of those, only 75 percent will get to reach their five-year milestone.

The odds of survival for small businesses in Australia are difficult to beat. So, for any business owner looking to make it past that five-year mark, proper planning and smart business decisions are imperative to keep their business afloat. One way of doing this is by cutting back operating expenses to increase profit margins. Here are some smart ways of doing this.

Outsource Your Operations

Hiring your employees means paying for monthly salaries, government-mandated benefits, bonuses, overtime, taxes, and other employee-related expenses. Compare this, however, to outsourcing your work where you only have to pay for the labor or services done and not for the people doing it.

Outsourcing can reduce your operating costs as you’re only paying a fraction of what it costs to have an in-house employee do your work. It’s recommended you hire Australian BPOs in the Philippines as the quality of the service provided matches the quality you’d expect from an in-house team, but at a fraction of the price compared to hiring your own staff.

Lower Your Office Space Costs

You’re not just paying for the office rent: you’re also paying for the insurance, taxes, utilities, and added perks for your employees like drinking water, coffee, and snacks. Sure, having orange juice with pulp available in your pantry can be healthy and boost morale, but the cost of providing it doesn’t reflect on your business’ profits. And these can accumulate your operational expenses.

However, if you run a company where everyone is working from home, you can forego the costs of an office. One good way of doing this is by setting up a virtual office and having your team meet at a co-working space only when necessary.

Of course, this isn’t feasible for all types of businesses. But if your kind of business can survive with most or all of your employees working from home, it’s a convenient setup for your employees and a cost-free solution for your office space costs.

Go Green

Turning your office into an eco-friendly workplace is not only good for your business image and helpful to the environment, but it can also save your company around 16 percent more on costs? This is because of what your business is cutting back on because of eco-friendly practices.
Going green means, for instance, reducing paper usage or completely getting rid of paper in your company. Printing on both sides of the paper rather than printing on one side and having a stack of scratch papers ready means less paper is wasted. Turning off lights and appliances and using energy-efficient fixtures can save electricity, which results in lower electricity costs. And using energy-saving measures can reduce heating and cooling costs, power, and your carbon footprint.

Cutting operating costs doesn’t have to start when your business needs to reduce costs drastically, but it can be a practice to help sustain your business over time. As much as possible, small business owners should be pragmatic for the future success of their business.