Guest post by Lexie Lu.
Running a business is expensive—especially a tech company that’s trying to provide the best services possible for clients. Despite growing demand for networking solutions, security software and IT services, these operations can still run into money problems, even when things are going well.
Here are four of the best ways for tech businesses to save thousands of dollars over the course of a year.
1. Take Advantage of Automation Tools and Software
Repetitive tasks, such as sending emails, scheduling posts, and keying in information, can eat up a lot of time. There’s almost always more important, creative work that needs doing—like communicating with customers or walking a client through a new service.
Statistics from small and medium businesses show that automation tools can reduce or eliminate these tasks entirely, making a big difference in day-to-day workflows. According to stats from Zapier’s Q3 2020 Automation Confidence Survey, 30% of employees say automation software saves their company money, and 44% say it saves time.
Automation can also help reduce the risk of error if you still rely on manual data entry to create documents like budgets or spending logs. These tools can prevent mistakes, save money, and reduce the chance you’ll have to check and verify logged data.
If you do accounting and budgeting in-house, reducing errors can also help you cut back on costs, avoid unexpected expenses, and know how much money your business really has.
Your exact savings will vary depending on how extensively you implement automation tech and what kind of tasks you can automate. One study on IT outsourcing found that automating these services could provide a total cost reduction of 26-66%. Other automation tools—like those that streamline your communication, marketing or administrative tasks—may also provide some modest additional cost reductions.
2. Optimize Your Working Space
While some businesses have pivoted to mostly or fully remote teams, many still need some kind of physical office space to bring their team together.
In general, most tech companies have more office space than they need, regardless of size. Research from American Express has shown that even the biggest companies only manage to utilize around 35-40% of the area they own—resulting in substantial extra expenditures on things like rent, maintenance, cleaning and lighting.
Not every entrepreneur or business owner may want to go fully remote. After all, there are advantages to having a physical office space, like improved team collaboration and easier in-person meetings. Still, cutting back on the amount of space your business uses and optimizing the area you keep can provide some serious savings.
For example, going green is one of the best ways to cut down on office energy costs. Top-performing LEDs use around 80% less energy than comparable fluorescent lighting. According to the U.S. Department of Energy, they provide annual energy savings of approximately $1.64 per square foot of office space. Because the average office has about 150 square feet per worker, switching would mean savings of around $2,500 every year for a company with just 10 employees.
Data centers or other spaces that need to cool large amounts of heat-generating electrical equipment should upgrade to an HVAC system and improved filters. This can help reduce power and maintenance costs by making the HVAC more efficient and reducing circulating dust, which can cause problems for electronics.
Other energy-efficient tech can provide further savings. For example, you may be able to install smart lighting systems that can use data from smart cameras and sensors to automatically adjust office lighting. They can dim or shut off lights when no one is in the building—or according to the schedule your employees tend to keep.
You can use similar smart systems to dynamically adjust heating and cooling—or even open and close windows—providing a comfortable office environment for significantly less money.
3. Market Smarter
Marketing is at the core of business success. It’s how you draw in new clients and encourage existing customers to invest in additional services. However, effective marketing is often expensive and challenging to optimize.
Low-cost marketing methods can help you continue to grow your business without necessarily investing more in your ad budget.
Content and social media marketing can continue to draw traffic to your website long after the initial investment in a post, campaign, or event. These techniques also provide educational value, which can generate recurring customers who have faith in your brand.
Better data can also help improve your digital marketing efforts. Most companies that invest heavily online already use analytics tools to ensure they can access valuable customer data. However, redundant applications can be a significant unnecessary expense.
According to data from Gartner, they account for 27% of marketing budgets on average—but at the same time, marketing organizations and departments often spend on tools with overlapping functionality. Applying a strategic model for marketing technology can help companies buy the right tools with minimal overlap.
4. Embrace AI
Investing in cutting-edge tech, like artificial intelligence (AI) and machine learning, can provide significant savings. You don’t need deep expertise in these advanced technologies to take advantage of the increasing number of AI-based tools for marketing, sales, and other business functions.
For example, AI-powered chatbots can be a powerful tool for businesses that struggle to manage the volume of customer service requests they receive. According to data from IBM, “businesses spend $1.3 trillion on 265 billion customer service calls each year,” anywhere between $15 to $200 per customer service query.
Chatbots can help reduce these costs. Some of the most advanced versions are able answer up to 80% of basic questions, freeing up customer service representatives (CSRs) and other staff to handle sensitive or complex technical issues that require direct, human attention.
This can drop your per-query costs from the $15 to $200 range typical for human CSRs to less than $1 per interaction. For a small business that manages as few as five to 10 customer service interactions per day, this could mean thousands to tens of thousands of dollars in yearly savings. For larger companies with more customers and a simple sales funnel, these savings can be even greater.
If your business is an IT service provider, adopting AI tech may also help you offer additional services in the future; valuable new services for clients that your competitors may not yet offer.
Saving Money for Your Tech Company
With the right adjustments, tech businesses can save thousands of dollars each year. Optimizing marketing spend, investing in automation, and using new tech to reduce office expenditures can help any company reduce its day-to-day expenses.
While some upfront investment may be necessary, these strategies can yield big benefits in the form of lower recurring costs and more efficient workflows.
Lexie Lu is a freelance designer and blogger from Williamsport, PA. Her ideal morning includes some HTML code and a cup of coffee. She writes on Design Roast and can be followed on Twitter @lexieludesigner.