5 Ways to Lower Your Online Business Costs

According to the latest report by NetCraft, as of January 2015 there were 876 Million websites in the world but only 177 Million were active.

While the number indicates only 20% of registered domains are actively engaged in business, the figure is nonetheless impressive. Another way to view this data is that 2% of the world’s population is involved in online business.

There are several factors why people start online businesses and while the purpose may be different the common denominator remains the need to make more money.


5 Ways to Lower Your Online Business Costs

People who start online businesses are categorized as small business owners. As such, it is safe to assume that people who run online businesses have tight budgets or limited access to capital.

Thus, it becomes important for the business owner to focus on running the enterprise efficiently. In business, efficiency means to streamline costs and attain an equilibrium point where productivity and quality are not compromised.

Without any further ado, here are 5 ways you can lower your online business costs:


1. Review Your Costs

If you plan to lower your online business costs, start by reviewing your summary of expenses. Generally, there are two types of costs in a business:

Fixed – These are your cost items the amount of which is not dependent on the productivity of your business. Examples of fixed costs are rent, dues, insurance and interest expense.

Variable – By contrast, variable costs are items the amount of which are influenced by to the change in production units. Examples of variable costs are labor, utilities and telecommunications.

With the assistance of your accountant, review your costs by analyzing your business’ Income Statement. The Income Statement is a valuable document which correlates effort to productivity.

You can identify which cost items are hindering your profit margins, under-utilized or over-utilized and design streamlining strategies from there. Once you have identified the probably cost items, you can begin an audit on operations.


2. Outsource Services

Outsourcing has been a proven strategy in lowering business costs since the 1970’s. Outsourcing works by capitalizing on comparative cost advantages and economies of scale that are prevalent in other regions.

Labor is often the item where comparative cost advantages can mostly be found.

Your review of the Income Statement can reveal low profit margins due to high variable costs, high level of receivables due to unearned revenues or perhaps high opportunity costs due to under-utilized assets.

Outsourcing can address any of these conditions because not only does the process lower cost but it can also increase productivity. By outsourcing back office support, not only do you lower labor costs but you also improve collections of unearned revenue.

By integrating virtual assistants, you are able to cover all areas of the business by delegating non-essential tasks and afford you the time to personally handle core functions thereby limiting the incidence of missed opportunities.


3. Capitalize on Technology

In October 2014, the number of SIM cards officially exceeded the population of the entire planet. In January 2015, smart phones officially surpassed the desktop as the primary source of online traffic. There are valid reasons why mobile technology has evolved exponentially since 2012.

Mobile technology has responded to the demand of consumers for more convenient systems to communicate and access the Internet.

There are several platforms available on the Internet that make communication more accessible, efficient and affordable.

In fact, most of these platforms are free of charge. Instead of incurring charges for long-distance calls, you can use Skype to connect and have the option to conduct an audio-visual call.

If your client is on the move, you can still connect to his mobile phone through Viber free of charge.

If you have a sales team, use IP Phones and apply for a subscription plan which fits your budget. Some of these carriers offer unlimited calling benefits which will lower your telephone expenses and increase productivity.


4. Utilize Digital Marketing Strategies

While traditional marketing strategies have their place in the marketing agenda, going digital is the most efficient and effective option. Digital marketing strategies allow you to reach out and harness the wide scope and depth of the Internet.

There are several online marketing strategies to choose from: social media, e-mail marketing, blogging and link-building to name a few and these are all effective and generally free of charge.

The only compromise you have with digital marketing is time. You need to allocate time in your schedule to conduct digital marketing activities especially for social media. A solution for this is to outsource social media marketing to a Virtual Assistant.

The cost of hiring one will not break your budget and the productivity generated will justify the expense.


5. Periodically conduct maintenance work and upgrade software

Your computer will be the most overworked asset in your online business. Whether it is a desktop, laptop or mobile variety, it will be subjected to wear and tear and some of its software applications will become outdated.

By implementing periodic maintenance work you can offset the cumulative wear and tear that affects hardware. Updating frequently used software applications will ensure programs will continue to run efficiently.



An online business is a great way to earn money without incurring a high level of costs. But when costs are unmitigated it will eventually consume your profit margins.

Always stay on top of your costs and do not hesitate to implement strategies that will reduce costs as long as these do not compromise your productivity and level of quality.

Do you have any other suggestions for lowering online business costs?

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