Running a business can quickly become expensive. When your business is flying high, these expenses won’t seem like a big deal. However, when things slow down, you might want to downsize your business to cut costs.  Here are eight ways to downsize your business to save money.

1. Downsize Your Work Premises

If you’re looking to cut costs significantly for your business, downsizing your premises is one of the best things you can do. In most cases, renting or buying a commercial property to run your business out is a significant expense.  This can be difficult if you’re running a customer-facing business as the location is extremely important. However, businesses that simply need an office can easily find cheaper properties or even rent office space in a large commercial building. You might find that you can reduce your overhead expenses simply by finding cheaper space.

2. Find Cheaper Providers for Essential Expenses

Even if you find a cheaper place for your business, you’ll still need to deal with essential expenses such as utilities, internet, and business equipment. Fortunately, you can always find cheaper ways around these things to reduce your monthly costs.

For instance, you might want to compare heat and electricity providers and find ways to make your office more energy efficient. You could also look for a better internet deal, but keep in mind that it’s worth paying for efficient, high-speed internet. When it comes to supplies and equipment, buy anything important in bulk and cut out unnecessary items.

3. Allow Remote Working

Allowing your employees to work remotely can drastically reduce your business expenses. This can make it much easier to downsize your premises, reduce utility costs, and even get rid of potential extra costs such as reimbursing workers for their commutes and providing compensation for workplace accidents.

Working remotely can even make your business run more efficiently. If you use the right remote tools and apps, you can easily assign or automate important tasks.  You’ll no longer need to worry about employees showing up late due to traffic. You might even want to make your business fully remote and simply pay for a virtual business address instead of an entire office.

4. Move More of Your Business Online

In addition to allowing remote working, you can make your business significantly more cost-efficient by operating online as much as possible. For instance, if you’re running a retail store and you’re not getting many customers, running an ecommerce shop can help you build a customer base while also eliminating the need to pay for a physical store.

The same applies to all kinds of businesses. Many companies around the world now operate online and use clever digital marketing strategies to attract customers or clients. You’ll need to invest in a good business website, but you’ll still significantly reduce your overhead costs and likely increase your profits.

5. Make Use of Cloud Storage

Many businesses pay extra for things like servers and hard drives on top of spending extra time physically backing up all of their data. You can streamline this process and cut your costs by using cloud storage instead.

Cloud storage allows you to store your digital assets remotely, making them accessible from anywhere. Instead of having to pay for expensive physical storage solutions or spend hours taking regular backups and transferring your data, you can store what you need swiftly and access it remotely no matter where you work from.

6. Consider Different Warehousing Options

You might also want to consider cheaper physical storage options. Many businesses pay for warehouses or large business premises to store their stock and equipment. Instead, you might want to look into different storage options that are a bit more affordable.

Some businesses enlist the help of drop shipping services that store the products and ship them out for you. This can save a lot of time and money. Businesses can also save money on their premises by renting a storage locker or even using a mobile storage container.

7. Outsource Business Tasks

Outsourcing certain business tasks is another excellent way to downsize your business and save money. For instance, let’s say you need to increase marketing for your business. Instead of paying for a department of marketing experts and all the supplies they need, you can simply hire a business-to-business marketing agency.

You can also outsource various other tasks such as accounting, bookkeeping, human resources, legal issues, manufacturing and shipping. Enlisting the help of remote services can help you cut the costs of recruiting and paying new staff, as well as making it easier for you to downsize your premises.

8. Consider Reducing Your Workforce

Downsizing your business may require you to reduce your staff. Although it’s best to avoid this, it may make sense if you’re already downsizing your premises or considering going in a different route for your warehousing, accounting and/or marketing.

Make sure you handle this process carefully and treat your employees with respect.  If possible, use a hiring freeze to achieve your optimum staffing level without going through the pains of a layoff.   Whichever way you do it, downsizing your staff can help you reduce overhead costs and improve business efficiency if handled correctly.


Although downsizing your business isn’t always the best option, it’s a good way for businesses to reduce overhead costs, change directions, and increase their profit margins. These 8 tips can help you downsize many of the major costs of running your business, resulting in a more cost-effective and successful company.