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How to Cut Business Expenses Without Budget Cuts"/>

How to Cut Business Expenses Without Budget Cuts

If you’re like most smart business owners, you’re looking for ways to increase revenue and cut business expenses without negative impact on customer service or staff benefits.

Though it may seem like a tough job to fund your small business  and cut business expenses at the same time, budget cuts should be the last option on your agenda.

To help you, we’ve compiled 5 essential tips: from insightful financial strategies to indispensable services and low-cost tools for business that will save you time and money.

This brief but informative list will give an instant boost to any small business budget.

No.1 – Implement the 80/20 rule to reduce business expenses

The 80/20 rule is the entrepreneur’s golden rule. Otherwise called the Pareto principle in honor of its pioneer, economist Vilfredo Pareto, this rule proves that 80% of output comes from only 20% of input. The Pareto principle is applied in areas from finance to software development to sports. In business finance, it proves many “surprising” facts: for example, statistics prove that about 80% of business revenue comes from circa 20% marketing effort and nearly 80% of sales are in fact accomplished by 20% of company employees. By understanding how the 80/20 rule applies to your business and putting it to work in marketing and sales, you’ll learn how to reduce business expenses and do more with less effort.


Use analytics tools such as suggested below to analyze where 70-80% of your revenue comes from (The ratio doesn’t have to be 80/20, but it will always be unequal). This may be specific customer demographics, a marketing channel such as SEO (use Google Analytics to analyze web traffic sources) or your product niche. More often than not, the results will give you a lot to think about. Once you understand the channels where your customers are coming through, you’ll be able to concentrate effort in that area. Remember: if just 20% of input can generate 80% of result, imagine how you can grow by focusing on that 20% which drives major revenue for your business.

No.2 – Study profit margins to control and reduce expenses

One of the essential things to get the heads-up on is your business’s Profit Margin. This is the ratio of your profits in relation to total costs and is calculated by specific time period. (You can do this for a period of a quarter, a year, etc.) To reduce business expenses, you’ll need to understand the two types of profit margins: gross profit margin and net profit margin. While the former is responsible for evaluating the performance of a single product, net profit margin will track down your company’s overall performance.

how to cut business expenses


Start with looking into your accounting books (or software) and reducing business expenses with calculating your gross and net profit margins. When you have both numbers, the next step is understanding them: 20% gross profit is good performance for grocery retail but very poor for online retail. See average nationwide statistics for gross and net profit margins by sector to analyze your own standing. Finally, take the time to redefine your goals and marketing strategy based on the results.

No.3 – Cut business expenses with a VoIP phone system

If you’re currently using a landline for business communication, a super simple and convenient way to reduce business expenses without budget cuts is to upgrade your business phone system to VoIP. Voice over Internet Protocol (VoIP), or put it simply, Cloud Telephony is a major player in the modern communication market and a top-5 tool on any list of how to reduce business expenses. If you’re wondering whether VoIP is right for your business, let’s put it this way: do you want to wake up with no piling phone bills, increase your mobility as an entrepreneur, and boost customer service at the same time? If that answer is a yes, check out how to cut business expenses with MightyCall.

What you get for free with any MightyCall plan:

  • Local, toll-free or vanity number at no extra charge – a toll-free or vanity number is a simple way to show clients that you mean serious business all with no extra investment on your part. Now that’s a bit of real VoIP magic.
  • Multiple devices supported – with the MightyCall virtual phone system, you can answer calls on any device with internet connection. Due to the reliable call channels, call quality remains impeccably high wherever you’re calling to and from.
  • Reliable service – Professional VoIP is not to be confused with free solutions like Skype or Google Voice which don’t offer business-level call quality or reliability. Our business telephony is so reliable, it’s used by some of the most demanding industries such as medical clinics.
  • Unlimited extensions – all of our plans offer unlimited extensions so you can connect as many users as you need with no extra fees.
  • Call queues and call flows –a call queue directs customers to a specific person in your business or his/her voicemail based on availability. Even if you have multiple customers calling at the same time, you’ll never miss the call. You can also change these settings anytime in your online profile.
  • User-friendly dashboard –a single place for your call history, messages, voicemail, call recordings, analytics, and more.
  • Messaging and unique web widgets – Statistics demonstrate that over 80% of online customers need help during or before a purchase. MightyCall’s unique web widget allows you to place click-to-call widget on your website to retain customer attention in even more ways than traditional calls and messages


MightyCall plans start at $15/month and include a free trial on all plans. If you’re a small team, try our Business plan offering unlimited minutes, 2 toll-free or local numbers. For larger businesses, unlimited minutes and users are available on our Enterprise plan. All MightyCall plans offer amazing VoIP features.

No.4 – Choose cost-effective workplace tools

Today’s market offers tons of financial, marketing, and social tools to help entrepreneurs reduce business expenses. A great deal of these are free. While in their variety these tools seem to encompass every need a business owner may have, it’s important to know which free tools your business can use to cut expenses in business and increase revenue and when it’s best to invest a few dollars but save yourself a good deal of stress.

ways to cut business expenses

Essential free tools for small business

  • Wave Financial Software– If you’re a solo entrepreneur or small tram, grab this 100% free accounting software that makes less exciting business tasks such as invoicing, banking, and payroll user-friendly and simple.
  • Ecwid e-commerce–For business owners who need a cost-effective solution to start selling online instantly, Ecwid offers a fabulous free online store page. They also have low-cost options for a growing business.
  • Google Analytics – web traffic analytics becomes your number one marketing tool with the help of Google Analytics.
  • MailChimp e-mail marketing– if you still aren’t giving customers the heads-up on your business with regular newsletters, sign up for a free MailChimp account. You can start sending newsletters to up to 2000 subscribers which means your business will never get lost in the mass of competitors.
  • Canva Design– whether you need a modern banner, flyer, promo poster for your store or an attractive social media post for online marketing, Canva is a great tool for business owners who like to be creative and save money.

3 essential tools for small business for under $50/month total

  • Wix site builder – If your current web hosting platform is eating up your finances or your brick-and-mortar store is missing from the world wide web, fix both with a low-cost modern platform like Wix. You can design a stunning page with your own domain for as low as $5/month.
  • MightyCall VoIP System– cut business expenses while unraveling amazing calling features for every business size. Plans start from $19.99/month, with a free trial.
  • Salesforce CRM Software – the #1 CRM solution for growing business, Salesforce lets you track and manage customer sales, service, marketing, engagement, and much more all in one place. Pricing starts at $25/month – and the free trial is definitely worth checking out.


Carefully research and note down the features of any software before buying/using it and compare that to the checklist of features your business can’t do without. If free software doesn’t cater to your demands, don’t waste time making the free product “fit” – choose a cost-effective alternative instead. Get products that offer free trials, so you can always try before your buy.

No.5 – Reconsider your business’s target audience

Concentrating your sales and marketing efforts on a specific target audience is an effective way to increase revenue and reduce business expenses. Niche products are extremely popular in today’s market where everyone is searching for something unique. And that’s exactly where you want to come in: whether your product is best described as “rare vintage vinyl records in California”, or “knit sweaters for expecting moms in Canada” – having customers find your business via organic search is going to be much easier with niche marketing. You’ll also reduce business expenses needed in order to beat all the competition for general-type products.


A niche isn’t just about product type. It can refer to: geographical area (city, state, area, etc. that your product can sell well in); the price category of your product (affordable, designer, premium, etc.); the demographics of your audience (if you sell kids’ products, specify: infants, toddlers, kindergarteners, etc.); and the interests of your audience (think of occasions your product can cater to).  Once you think of all the adjectives that describe your product in a specific way, paste that into Google to research the niche and get more ideas. Finally, you’ll be able to apply the results in two ways: 1) present your existing product better and cut back on general marketing costs or 2) create a new product tailored to the audience that shows considerable interest in your business.

In conclusion

No matter what the size of your business and your current financial standing, remember the age-old adage: there are always at least three solutions to any problem.

To reduce business expenses, you don’t have to make drastic changes or budget cuts – these will only cover up the immediate problem but won’t solve the underlying issues.

The key is to isolate both your strong and weak sides and invest time in improvement. This will ensure that your business grows with the times and is always a step ahead of any competitor.

Angela Yurchenko
Angela Yurchenko is a business journalist and Content Manager at MightyCall.
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