4 Cost Reduction Strategies For Small Businesses in 2020-2021

Last updated October 8, 2020 written by Tetiana

While most entrepreneurs focus on increasing sales and profitability, it is just as important to work on decreasing expenses and employing cost reduction strategies that can help drive business success for the long-term.

According to research conducted by the University of Tennessee, only 25% of businesses can survive after their first year and 35% fail within two years of inception. These are abysmal numbers, but that doesn’t mean that your business has to be a part of these statistics.

Whether you operate a small business or own a large MNC, finding cost-effective measures that improve efficiency should be a big part of your business plan if you are looking for long-term success.

cost reduction strategies

Cost-Saving Ideas For Companies – Why You Need Them?

It is becoming increasingly challenging for businesses to stay afloat in the current economy.

Even if you are bringing in a lot of revenue and there’s good cash flow, chances are that you also spend a lot on day-to-day operations even when most of the workforce is working from home.

It is essential to cut these costs and streamline your expenses before things become even more difficult. It is also advisable to plan out your business structure, outlining the total production costs, manufacturing costs, overhead costs incurred and whether your business is still able to reach your target market.

Some Cost Reduction Strategies That Your Business Can Employ

The following strategies cost next to nothing and offer a significant pay-off over time, so use these key points to ensure the continued profitability of your business and augment your cost reduction efforts.

1. Hire A Virtual Receptionist

Does your business require a receptionist that can be available 24/7 and cater to your customer’s problems? At the same time, does your business lack the finances needed to hire and manage a full-time additional employee?

In such cases, the answer is hiring a virtual receptionist!

Having a virtual receptionist instead of an in-house receptionist is one of the many cost reduction techniques that your business can undertake to reduce financial costs.

For starters, it will help cut down the salary costs and any over-time hours that your in-house receptionist serves – not to mention the resulting customer service will be of higher quality. This will allow your business to spend money on other critical managerial aspects of your business that require immediate finances.

You can also run a thorough cost-benefit analysis of your production process to see how much your business will save up in the long-term.

You will no longer have to worry about micro-managing staff schedules or looking for a substitute on your receptionist’s sick days or vacation days. Moreover, hiring a full-time employee to manage small call volumes can be a complete waste of resources.

A virtual receptionist, on the other hand, can give personalized attention to calls without the added expenses and burdens. Our virtual telephone-answering receptionist service provides you and your customers with a dynamic experience that is both cost-efficient and customer efficient.

At Nexa, we have provided virtual-telephone services that cater to different niches such as NexaMedicalNexaHomeCare, and NexaProfessional. In each of these services, Nexa provides industry-specific certification for its receptionists to offer 24/7 customer support and solve problems accordingly.

2. Simplify Processes Through A Mobile App

Companies are increasingly using mobile apps to keep track of their work and increase efficiency. Our Nexa Receptionist Mobile App can manage all your office data in real-time by providing users an exclusive mobile app and desktop portal to manage both employees and clients.

It can help employers streamline their work-flow and reduce costs.  For example, as a business manager, if you’re unable to commute to the office, the Nexa Mobile Portal can allow you to check your messages, review official data and manage your call flow – all in real-time, which saves up on fuel costs.

Many manufacturing companies make use of mobile app CRM to improve responsiveness between the sales team and their customer base, which reduces downtime and lowers maintenance costs. Our receptionists are trained to use different software platforms to ensure that they deal with a wide variety of clients accordingly.

According to research conducted by McKinsey, almost 70% of the respondents said that their organization’s performance increased considerably when their leaders were better equipped with digital technologies.

Therefore, we can say that accessibility of information and efficient communication with your employees can increase productivity, reduce labor and operating costs while also maximizing sales efficiency.

No matter which industry you work in, Nexa receptionists offer services you can utilize in any industry. Additionally, the 24/7 availability of a virtual receptionist ensures that your employees can use their skills for other work-intensive roles, bringing strategic cost reductions across the board.

3. Cut Cost Per Lead

Cost per lead represents the amount of money that a business invests in its marketing strategy to acquire a new lead. For every business, big or small, it is crucial to have an idea about how much of its finances a company is using for its sales conversion.

However, did you know that almost 80% of customer calls go unanswered and put on hold? Or that around 32% of callers hang up when not answered promptly?

Businesses can face a significant amount of loss when customer phone calls are not answered and cutting this cost is one of the most effective ways to enhance profitability. These slight losses can add up to quite a lot of expenses, and that can be detrimental, especially to new businesses.

With Nexa Receptionist, you wouldn’t have to worry about your in-house receptionists staying on call the entire time. Because virtual receptionists at Nexa will deal with all customer calls themselves and send you leads once they have dealt with customer queries.

They can also filter your calls and qualify your leads for you to get only the best leads. You can spend more time focusing on revenue-generating activities instead of managing your employee’s time to qualify every sales prospect that comes to you.

In short, hiring a virtual receptionist to increase conversion rates is one of the many expense reduction methods that your business can employ to increase profit margin.

4. Replace Traditional Advertising With Digital Advertising

In recent years, the digital revolution has taken the world by storm and businesses no longer need to be subjected to the higher costs associated with traditional marketing methods.

Studies show that over 57% of the world’s population has easy access to the internet, making the internet a massive forum of communication. Therefore, there has been a shift from traditional forms of advertising to digital advertising. The reasons for replacing traditional advertising can be several.

Digital advertising requires a smaller investment and can be modified at any time during a marketing campaign. For example, if you’re looking to launch a new food product resort to social media marketing, host giveaways and reach out to influencers to enhances your sales. These strategies will undoubtedly be more profitable than TV and radio ads.

With digital advertising, businesses can reach out to a broader consumer base and target their ideal audience. Unlike traditional marketing, digital marketing can also allow companies to respond quickly to consumer’s changing habits and influence their purchasing decisions.

Find Cost-Cutting Solutions That Work For You

With years of experience, Nexa has helped many businesses to integrate cost reduction strategies into their business plans. Some of the successful clients we have worked with include Salesforce, PracticePanther, and Lexicata, to name a few.

We offer a 21-day money-back guarantee so business owners and managers like you can experience our company's services and make the right decision for continued profitability.

Enquire after our services by calling 602.234.0111 or email us at  team.sales@nexa.com to learn more about our solutions and how we can help enhance your cost savings!

Frequently Asked Questions

What Is The Difference Between An Answering Machine And A Virtual Receptionist?

An answering machine will only be able to take messages on your behalf and forward them to you. A virtual receptionist, on the other hand, will not only take your calls but will also filter lead-generating calls and information-based calls to make better sense for your bottom line. Most importantly, with a virtual Nexa Receptionist, you can be satisfied that your business is in trusted and well-experienced hands.

Can Your Virtual Receptionist Submit Information To My CRM?

Our Nexa desktop client portal offers your visibility into the day-to-day workings of your business that takes place through our virtual receptionist. We have implemented automated message delivery services between business owners and the internal network system. See how we integrate all your call-data with the business software that you use.

Would I Need To Train The Virtual Receptionist?

Absolutely not! The reason we have virtual receptionists for a variety of services like NextMedical, NexaHomecare and Nexa Professional is to ensure that your virtual receptionist is trained in your area of expertise. All you need to do is hire them and they’ll get to work right away.

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