With high interest rates and an uncertain economy, most businesses I know are trying to cut their costs. For many, this is a season to prioritise profitability over growth.
Technology can be one of the best ways to improve productivity and reduce risk, but over time it is incredibly easy to lose track and build up waste: spend that does not improve the business’ output.
This week I’m not introducing you to any new tools. Instead, I have some practical tips to reduce your software waste.
Track your Software Spend
This sounds obvious, but many businesses don’t actually realise how much they are spending on software subscriptions. Like the gym membership that goes unused and uncanceled, these really add up.
Keep it simple and start a spreadsheet listing all software subscriptions and their costs. Go through your bank statements and look for all recurring expenses, including the annual ones.
Build the habit of keeping this list up to date as you sign up to new subscriptions and review it quarterly.
Consolidate Your Tech
Take the time to review the functionality of the software you use and look for overlap. Most software companies add new features over time, so you may no longer need separate software like you once did. E.g. I used to pay for Calendly for online bookings, but now HubSpot and Google Workspace do this too for no additional cost.
An added benefit is that you’ll improve productivity and make it easier to integrate systems with less software systems in play.
Pay Annually for Discounts
Many providers offer significant discounts for annual payments. The most common is 1 month free (pay 11 months for 12), but some providers provide discounts of up to 30% or more. If you know you’ll need the software all year, pay up front and reduce your annual spend.
Negotiate Your Rates
We’re used to negotiating for a new car, but we assume we have to pay the sticker price for software subscriptions. Often, software companies are open to discussing rates, especially if you’re a new customer or you’re considering moving off.
As a rule of thumb, if there’s a sales rep involved, there’s a discount to be had.
Reduce Unused Seats
Most software providers charge per user/seat. It’s super common to add users over time and then forget to remove them later as you reduce headcount or the business changes. Check all the software you’re using and make sure you actually need the seat count (and do this before the annual payment!).
While you’re at it, check the software settings and make sure your approval is required to increase seats/users. Many software providers default to letting new users join and increase your bill without any admin approval.
Downgrade the Plan
Sometimes we overestimate our needs. If you find that you’re not using all the features of your current plan, then downgrade. Just because you once needed it, doesn’t mean you still do. E.g. you might be on a high tier for your CRM to get advanced reporting that you never actually use.
By taking these steps, you can streamline your software expenses and improve your profitability.
