15 Effective Tech Tips for Startups & Small Businesses to Cut Down Operating Expenses

Most startups and small businesses usually emerge into the scene with limited monetary resources and even without backups. They believe in getting the most out of the available resources and scaling up with the profit earned. 

Little do they know, such limited budgets with no (monetary) backups often lead to disaster and a complete loss of capital. 

Since startups have a wide spending room but a limited budget, unplanned and arbitrary expenditure is fatal. It is the major reason for most startups and small businesses failing and going out of business within a short period. 

So how can startups and small businesses save themselves from such disastrous situations? 

It is simple. Operate businesses on a proven business model and, importantly, explore effective tech tips for startups and small businesses to cut operating expenses. 

This article has sculpted the top 🔝 15 effective tech tips for startups and small businesses to cut operating expenses. It will come in handy for entrepreneurs and surely help your startup sustain the downs of the market flow.  

Let us dig into the details:

15 Effective Tech Tips for Startups & Small Businesses to cut down Operating Expenses

  1. Adopt cloud telephony replacing traditional phone systems
  2. Make the most out of cost-effective office space.
  3. Build a powerful team of versatile individuals.
  4. Harness the power of pooling to lower investment 
  5. Practice quality over quantity.
  6. Build your brand around customers
  7. Go digital and get the most out of virtual technologies.
  8. Prioritize digital marketing instead of traditional marketing approaches.
  9. Incorporate employee engagement for bottom-line ideas.
  10. Monitor employee productivity using efficient strategies.
  11. Go green and lower financial expenditure.
  12. Invest in an accountant to manage finances
  13. Incorporate outsourcing and remote work.
  14. Seize any available opportunity.
  15. Filtering and dumping unnecessary resources consumers

1.    Adopt cloud telephony replacing traditional phone systems

Communication is the core element of any business, small or big. As a startup, you have to go through several calls, usually outbound calls and a few inbound calls. 

As your business starts to pick up the pace, you have an ever-growing list of customers to get in contact with. Here, cloud telephony comes into the equation to help you reduce your expenses by more than 50% compared to a traditional phone system. 

A virtual phone number has several advantages over the traditional phone system. The most important one is you do not have to invest in physical infrastructures like wires and devices. You can subscribe to a suitable package to meet your business needs for an inexpensive price.

Virtual phone numbers can prove a great investment for startups due to their scalability and flexibility. You can use existing devices like smartphones and laptops, eliminating the need for additional hardware. 

It also offers you scalability in both directions to meet your business needs without an upfront payment. Basically, cloud telephony reduces expenses and improves communication and employee productivity. 

2.    Make the most out of cost-effective office space.

As an entrepreneur, you should be smart to utilize your office space effectively. Create cozy workspaces for your employees, using every corner to waste no area. 

It is always better to rent office spaces than buy the whole place, and it is even better to co-rent the office space if it suits your business model and operations. For example, two ✌ companies with similar operations can co-exist.

It helps you share the rent and reduce your expenses. If you have spare spaces that you don’t use, it can be reasonable to lease the space to other businesses that comply with your business. It generates money on the side to help you pay yours. 

Remember: A software development company and a manufacturing company cannot co-exist. 

3.    Build a powerful team of versatile individuals.

Hiring skilled individuals is crucial to your business as a startup or small business. Since you have limited funds to operate with, you should look for versatility in your employees. 

They can lend hands 👐 in various related sectors, which help your business generate more with fewer investments. Gradually training your employees to perform associated tasks can be fruitful as well.

If you do not personally get involved in selecting new employees, it can cost you in the later stages. If the employees cannot be productive within the given time and available resources, it wastes money and time.

For example, Elon Musk, CEO of Tesla Motors, gets personally involved in hiring his employees. He said in an interview. 

Building a powerful team of versatile individuals helps your startup become more productive and guarantees better quality of service or products. It also directly (affects) reduces your salary expenses and generates greater revenues. 

4.    Harness the power of pooling to lower investment 

You should not shy out from reaching your niche businesses to create a pool of investment. 

As you all require similar if not the same products (raw materials) for your businesses, collectively, you gain the upper hand while purchasing supplies from the vendors.

Massive demand for goods helps you bargain for greater discounts. You might profit up to 25% of your supply investments, which is huge in the long run. 

It is the case with several online wholesalers like Amazon, Alibaba, etc.; they offer better discount rates for a higher number of products. The other good thing about pooling is choosing the best vendor to get your supplies. 

Saving money matters for startups and small businesses, usually in the initial phases. 

5.    Practice quality over quantity.

Your startups and small businesses should focus on producing quality products and delivering quality services from the very beginning. People prefer quality services and products even if they have to pay a few bucks more. 

Quality services and products attract more customers in the long run. Customer recommendation plays a huge role in sales and brand exposure, which is impossible without quality products and a seamless customer experience.

Customers willingly pay a few extra dollars 💵 for your service and products, which generates higher revenues and enhances your business reputation in the market. 

Practicing quality over quantity doesn’t necessarily reduce your investments but definitely helps to increase revenues and enhance customer retention.

6.    Build your brand around customers

Building your brand around your customers is very important since your business means nothing without customers. You startups and small businesses should focus on customer experience from the very beginning. 

If you win over the customers with your products and services, nothing can stop you from achieving business goals. As mentioned (in the section above), customer recommendation is your business’s best branding and marketing. 

Always involve your customers in your business in every way possible. It is always good to reward them on occasions for their loyalty. Do you know what is even better? Making them feel like a part of your business through various personalized customer experiences. 

Customers should be on the top of every business model to succeed. Never forget to build your business around customers. 

7.    Go digital and get the most out of virtual technologies.

From now on, the traditional business model will fail; your startup should go digital early and incorporate virtual technologies to cut down the operating expenses. 

Digitizing your business helps you reach a wider range of audiences and even the targeted ones. Use social platforms in every way possible to promote your business. 

You cannot manage your finances and record ⏺ them in hardcopies like in the traditional systems. You should digitize every aspect of your business, from presenting itself to managing finances and everything in between.

Virtual technologies come along with the digitization of your business. These technologies help you save money at a considerable rate since many of them allow your free services. In contrast, others cost a few dollars. 

For example, video conferencing for business meetings helps you reduce operating expenses by eliminating travel and accommodation expenditures. 

8.    Prioritize digital marketing instead of traditional marketing approaches.

As mentioned (in the section above), digital presence is the most important thing to reach more customers and gain their trust. Soon every business will go digital, and those who don’t will suffer consequences. 

”By 2025, the global digital transformation market is projected to reach $1,009.8 billion after expanding by 16.5% compound annual growth rate (CAGR), during this period.” states FinancesOnline.

As a startup, you should prioritize digital marketing instead of traditional marketing. Utilize free social platforms as much as possible. You should not hesitate to spend a few bucks on sponsored marketing too. 

A survey by mediavalet shows that email video content can enhance click-through by up to 300%. You can definitely increase your brand exposure by spending comparatively less than traditional marketing. 

It also helps you save money to some extent, which you can use in other aspects of the business.  

9.    Incorporate employee engagement for bottom-line ideas.

Employee engagement is the basic and effective method to collect ideas to better work culture. It doesn’t necessarily have to be managerial decisions. 

Collective ideas can help businesses process effective rules and guidelines to save a small amount of money. 

For example, if employees collectively agree to bring their (own) water bottles or mugs from their homes, companies do not have to spend money on paper cups. It may seem like paper cups 🥤 don’t cost a fortune. 

Let us say it costs $100 for a monthly supply of paper cups. It may not seem much, but it saves a lot of money in the long term. (100*12*5=$6000) worth of paper cups in 5 years. 

10. Monitor employee productivity using efficient strategies.

Whether manual or automated, you should have time to monitor employees’ progress and productivity. Manual monitoring might be tedious but accurate. 

Digitally automated employee monitoring and office productivity tools like Teramind, ActivTrak, TimeTraco, etc., assist you in monitoring employee performances. 

These tools ⚙ keep employees in check, punctual, and dedicated to their tasks during work hours. Such tools gather daily records to process employee activities and productivity levels, which can help you take action accordingly. 

Employees’ productivity directly affects your company’s growth, so you should keep your employees in check and encourage them with rewards and incentives for their exceptional performances.  

11. Go green and lower financial expenditure.

Go green and save green. You should use materials or resources that are cost-effective and, more importantly, eco-friendly. It helps you save a fortune in the long run, although it may not seem much initially. 

For example, digitally storing and sharing data eliminates paper used for printing, which in turn saves electricity and trees used to make paper. It is like a butterfly 🦋 effect. 

LED bulbs and e-vehicles may cost a little more upfront, but it helps your business in the long run. 

Your startups do not require brand new infrastructures to operate. You can reduce financial expenditure by recycling ♻ old materials and reusing refurbished devices. Refurbished items do not cost much, which lowers the initial investment up to 50%.

For example, A customer contact center can use refurbished devices like laptops, mobile phones, and tablets for communications. These devices cost a little above 50% of the original price. 

12. Invest in an accountant to manage finances

Hiring a professional to manage your accounts is one of the ways to cut down operating expenses in the long run. You might have to pay a little more initially, but it sure helps your business keep in check with various official and financial activities.

The professional will look all over the financial sector and keep everything in check. The person will provide your weekly to yearly details on finances, which you can use to devise new plans and business strategies. 

The person can help you maintain insurance and other policies so that you do not pay more money for redundant services. 

On the other hand 🖐, if the person is reliable, you will have one less thing to focus on and concentrate all your energy ⚡ on the growth of your business.

13. Incorporate outsourcing and remote work.

Outsourcing can be an alternative to full-time employment for many startups since it eliminates the situation of paying employees every month even if they stay idle or unproductive if you have less work. 

The next thing is outsourcing can be fruitful as those people are skilled at their job and you have to pay as per the contract, which sums up to be lesser than an employee fee. It saves you some amount now and then.

Remote work helps you save money for your business. The employees do not come to your office; they work from home. It means you do not have to spend on office spaces, infrastructures, devices, meals, and more. 

Global Workplace Analytics report shows that a typical company saves $11,000 yearly per remote worker who works 2 to 3 days a week.

In the long run, Remote work culture saves businesses a lot of money. 

14. Seize any available opportunity.

You should be optimistic and opportunist (without harming others) when it comes to business. Someone’s loss is somebody’s gain, and you should not shy from taking advantage when the opportunity comes. 

For example, a billboard has the phone number of some other business. It doesn’t harm anybody to call your local phone company and check if the phone number on the billboard is active. 

If it is not, then you struck gold. You can buy the phone number and link it to your business. You do not pay for the billboard, and your business gets unadvertised free calls. 

15. Filtering and dumping unnecessary resources consumers

You should be aware of everything that consumes your business resources, for instance, money. You should constantly filter applications and subscriptions that consume cash from your business accounts. 

During startup, you can subscribe to many applications and their services, thinking that you will use them. But you don’t necessarily use them at all or rarely use them. But those subscriptions cost you money every month. 

You should segregate those applications and unsubscribe them instantly to stop further unnecessary expenditure. Do not waste your budget on unnecessary services and products; there will be consequences, sometimes extreme. 


Cutting down operating expenses may seem like a mountain ⛰ of tasks, but it is possible through listed effective tech tips for startups. These tips may not save you a lot initially, but they will save your startups and small business fortune in the long run. 

You do not have to downsize your already small businesses and re-budget them; just analyze and evaluate your existing financial status to figure out (the places) where you can cut operating expenses in small amounts.

Mid-year evaluation can prove vital for checking business operations and financial status. 

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