Is your business looking for ways to enhance profits and add value? Profitability isn’t just about driving sales — it’s also about managing costs and planning strategically. And in today’s volatile markets, every dollar counts. Here are seven actionable ideas to help your company operate more efficiently.
1. Renegotiate key contracts
Long-term agreements can become outdated as your business evolves. For example, if you’ve shifted to remote or hybrid work or digitized operations, you may no longer need the same office or storage space. Consider negotiating your lease to reduce your footprint or secure lower lease rates in exchange for a longer term.
The same applies to other recurring obligations, including equipment leases, insurance, supplier agreements and loans. Even if contracts haven’t reached renewal, don’t assume the terms are set in stone. It’s common for businesses to underestimate their negotiating power in these contractual relationships.
If you’re nearing the end of a contract term, seek competitive bids from other parties. Be sure to let your current partner know you’re shopping around — it may be willing to beat other offers to keep your business.
2. Outsource non-core services
Outsourcing time-consuming administrative functions can be a cost-effective alternative to doing the work in-house. External providers often have the specialized expertise and tools that would be costly to replicate internally. For example, many organizations outsource payroll management, which requires an in-depth understanding of evolving labor laws and payroll tax rates. Outsourcing payroll can help reduce errors, eliminate software costs and relieve headaches for your staff.
Other services to consider outsourcing include administrative work, billing and collections, IT, and bookkeeping. (See “Outsourcing bookkeeping” below.) Outsourcing is often less expensive than performing these tasks in-house, especially when you factor in employee benefits costs. But you shouldn’t sacrifice quality or convenience. Vet external providers carefully to ensure you’re negotiating the best possible terms and receiving the expertise, attention to detail and accuracy your situation requires.
3. Buy smarter
Small adjustments in procurement practices can translate into meaningful savings. Consolidate vendors where possible, purchase in bulk and negotiate loyalty discounts. For example, if you host a catered dinner meeting for your sales team every month, contract with one or two local restaurants for reduced costs in exchange for regular business.
Early payment discounts can be another cost-saving opportunity. Some vendors may offer a discount (typically, 2% to 5%) to customers who pay invoices before they’re due. These discounts can provide significant savings over the long run, but you’ll need to have enough cash on hand to take advantage.
4. Review employee benefits
Employee benefits are critical for recruitment and retention, but they’re also a major expense. Consider ways to maintain value while reducing costs.
For instance, you also might be able to “shop” different health insurance carriers to lower costs without reducing coverage. Today, insurance providers may offer more cost-effective alternatives and bundling options than they did a decade ago. Also identify underutilized benefits, such as subsidized parking, unused life insurance enhancements and gym memberships. Regularly surveying employees about benefit preferences can help align spending with what staff members actually value.
5. Leverage technology
Most businesses already use technology tools, but few take full advantage of their functionality. Ensure staff are trained on the latest features of your accounting, customer relationship management and enterprise resource planning systems to minimize inefficiencies. Simple changes, like automating recurring billing or migrating manual reports to dashboards, can save substantial time and effort.
Likewise, teleconferences and videoconferencing may be cost-effective alternatives to in-person meetings and training. When the participants aren’t local, meeting face-to-face requires long-distance travel, which can be expensive and time-consuming.
In other cases, new technology can be a smart investment. For instance, consider replacing labor-intensive equipment with machines equipped with artificial intelligence (AI). These solutions have become more robust and less expensive in recent years, so they might be worth exploring, especially if you’re having trouble finding skilled workers.
6. Monitor tax law changes
Tax laws are constantly evolving, and staying informed can uncover new cost-saving opportunities. For example, the Tax Cuts and Jobs Act of 2017 introduced several tax breaks for businesses that are currently scheduled to expire at year end unless Congress passes legislation to extend or expand them. Congress is currently debating making several changes to the business provisions in The One, Big, Beautiful Bill Act (OBBBA).
In May 2025, the U.S. House of Representatives passed the OBBBA. As of this writing, it’s under consideration in the U.S. Senate, where lawmakers have proposed changes to the House bill. It’s unclear whether the Senate will pass the House bill or modify certain provisions and send it back to the House for reconsideration. However, it’s likely that Congress will eventually pass some legislation to avoid tax increases in 2026. Tax planning can be challenging in uncertain times, so it’s important to work with your tax advisor to ensure you’re optimizing your business tax outcome.
7. Go green
Energy-efficient machines, vehicles and building improvements may help reduce energy consumption, materials waste and operating costs. Plus, there may be state and federal tax breaks that make energy-efficient assets more affordable. Work with your tax advisor to understand the eligibility rules for green tax breaks before making major purchases.
In particular, pay attention to when green tax breaks are scheduled to expire. If signed into law, the bill working its way through Congress would repeal various federal incentives available under the Inflation Reduction Act. Monitor tax law developments and time asset purchases to take advantage of any tax breaks, if possible, while they last.
Continuous improvement
When it comes to maximizing profitability, businesses can’t afford to rest on their laurels. Owners and managers must always look for ways to operate more efficiently. Contact your CPA for best practices to help boost profits in 2025 and beyond.