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Reducing the operational costs is a proven practice to gain better margins. But how? let's find out how to achieve our target efficiently.
Small businesses often work on tight margins.
As a result, startup owners are always on the lookout for growing the revenue to sustain a healthy profit. Profit margin is a simple mathematical equation that depends on two factors: revenue and expense. For achieving higher margins, you have only two choices\u2014either to increase the revenue or to reduce the expenses.
Increasing revenue without overloading the employees or sacrificing the quality of offerings is a difficult task \u2013 especially with tight finances and limited resources. The second option, reducing expenses, is far more straightforward. Streamlining your expenses will have a direct impact on your profit margin.
Cost cutting is arguably the easiest way to improve the profitability of your startup venture. Introducing a systematic cost-control method can result in immediate savings. At the same time, it would ensure competitive profit margins in the longer run.
So what are the best ways to reduce operational costs? Let's find out three effective ways to achieve your target without compromising on the quality and performance.
1. Embrace Technology
Take a look at your current administrative processes and identify areas that could be\xa0automated using technology, instead of manpower. The business world is changing rapidly and keeping up with the latest advancements by harnessing technology will result in significant reduction of operational costs.
There are several online solutions that can automate various small business functions at a fraction of the cost involved in employing human resources. By automating repetitive tasks, you can save hours of manual efforts every day. Your employees can utilize the time to improve the business productivity. Moreover, machines are not prone to committing mistakes. Thus technology allows businesses to eliminate human errors.
How Technology Can Reduce Operational Cost?
Reduce Payroll Burden
Instead of employing a team of accountants and finance officers, you can improve the efficiency by incorporating an accounting and invoicing software. It would eventually help you to make a decent saving on employee wages.

Lower Marketing Costs
Traditional forms of marketing are costly and outdated. You should leverage the power of the internet to reach out to millions of users online. As you might already be aware of, there are both free and paid advertising opportunities available online. Instead of hiring a marketing agency, you can make use of free classifieds websites and cheap CPC advertisements to promote your business. Not only it would come out cheaper, but also be more targeted and effective.
Pay Lesser on Office Essentials
Technology can be used to reduce the expenses on office essentials. In this age of Skype and Google Voice, do you really need to pay hefty bills on mobile and landline usages? Similarly, you can embrace technologies like\xa0Google Drive\xa0or\xa0BaseCamp\xa0to centralize documents and file storage instead of using paper documents. That's a smart way to get rid of the costs associated with printers and paper-works.
Save on Travel Expenses
Commuting costs and travel allowances contribute a significant