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I've collected 27 money-saving tips from real small businesses that are succeeding in a tough economy. Real people, real businesses and real ideas to help you cut costs, lower your overhead, and still reach your target market and build your business. Cut traditional advertising in favor of low-cost alternatives.

The main function of any businesses is to make money. Businesses that make money can serve their customers and advance their cause (hopefully it’s a good one), whereas businesses that lose money aren’t businesses for much longer.

Hence, businesses need to be worried about the bottom line. They need to ensure they are set up for long-term financial growth, and that means not just increasing sales, but also controlling expenses.

That being said, far too often businesses cut expenses in an effort to save money. And, ironically enough, those moves wind up costing them a lot of money in the long run.

So, yes, sometimes cutting expenses is the right move and sometimes it’s downright necessary. But, here are nine common things businesses do to save money, which actually wind up costing them much more money in the long run.

1. Cutting salaries and/or benefits, either to existing employees or new employees.

Salaries and benefits are often a company’s largest expense. So what better way to save money than to cut them?

Well, not so fast. No employee is going to happily accept a reduction in salaries or benefits. Which is why few companies take this approach with their existing employees.

Instead, many companies begin offering lower salaries or worse benefit packages to new employees. That’s an equally bad idea.

Think about it: if you are trying to save money, it means your talent isn’t performing where you want them to. If you cut salaries for new employees, it’ll mean you'll attract a lower level of talent going forward (generally). So, if your current people aren’t getting the job done, why would a slightly less in-demand talent base be able to get the job done?

So what’s the solution? Companies can do two things. First off, perhaps changing the salary structures for new employees and linking it more to performance. By doing that, employees could potentially make more, if they excel in their role.

Or, it’s time to take a hard look at how your existing talent is being deployed. Are your people not performing up to expectations, or are you not putting them in a position to succeed? If that’s the case, hiring more people – regardless of the price – will only exasperate the problem.

Bottom line, cutting salaries will only lead to worse talent. Unless you plan on changing strategies, how will a smaller talent pool help you better achieve your business goals?

2. Creating an inordinate amount of processes to save money.

One person at your company puts $4,000 on the company credit card for drinks at the local bar. Rather than discipline that person, the company overreacts and creates a burdensome expense policy for all.

And people groan, because 99 percent of them were responsible with their expenses.

Or another person hires a subcontractor that doesn’t work out. Rather than finding the root cause of the problem and dealing with it one-off, you create another burdensome policy on hiring subcontractors that requires employees to hire the lowest bidder, unless there’s a compelling reason not to.

And quality suffers.

It happens time and time again. A few employees do something wrong. Rather than deal with that problem as a one-off, the company overreacts and instills burdensome policies that assumes guilt, until proven innocent.

While these controls are often put in to save money, what they really do is discourage creativity, disengage employees and cost a lot of money to enforce. While a company needs a few well-defined policies, having too many destroys your culture and requires entirely too many resources to maintain.

3. Hiring a high-priced star to fix an otherwise underperforming team.

A team is underperforming, so a company will spend money on a high-priced star to turn that team around. While this doesn’t sound like a cost-saving measure, it really is: it’s just the fastest, laziest way to attempt to fix the problem.

And it doesn’t work. An in-depth study by the Harvard Business Review found bringing in high-priced stars to fix underperforming teams actually winds up costing a lot of money in the long run.

Instead, the only way to truly fix an underperforming team or an underperforming organization is to fix its fundamental systems, i.e. the way it hires and develops its people or its strategy. Those are more in-depth, expensive processes; but they are the only way to turn things around.

4. Indiscriminate layoffs

Layoffs are never good. They destroy morale, weaken the company and signal to the market something isn’t working.

Yet sometimes they are necessary. But a company should never lay off people indiscriminately.

What does that mean?

It means laying off everyone in a department or everyone at a certain pay rate or level, regardless of performance. It’s the ultimate hatchet move, cutting off an appendage of your company with one fell swoop.

That’s dumb. There are often top performers within that group you’ve spent money on already recruiting and retaining. Do your best to identify and reassign them to other roles.

Granted, being more precise will take more time. But that time will pay off, as losing top performers is never a winning business strategy.

5. Not investing in high performers.

High performers are performing well! Everything is great! Why would you possibly need to invest in them?

Here’s the reality: high performers are the people that will push your organization to new heights, the future leaders of your organization. Conversely, they also tend to attract a lot of attention from fellow companies, and have big ambitions to do great things.

If you don’t challenge them, if you don’t pay them what they’re worth and if you don’t find out what they want to work on, they are going to get frustrated, fast. And it isn’t particularly difficult for a highly talented employee to get a great job elsewhere.

So pay them, promote them when they are deserving and allow them to move laterally within your organization, so they can master new skills. High performers have exponential impact, and you want to ensure that impact is at your company – not a competitor's.

6. Not investing in low performers.

Here’s the other side of the coin. Whereas high performers will have a massive impact on your organization’s success, low performers will likely have very little. Wouldn’t it just be easier to get rid of them?

Well, maybe. People will accept a fellow employee getting fired if they are given a chance to improve. But just firing them without that chance will destroy morale and cause others to leave as well.

Beyond that, you don’t want to be firing people at all. It’s expensive to recruit and train a new person and it usually has a negative effect culturally.

So, work with your low performers, provide coaching and training to help them improve. Encourage a lateral movement to a position that might better fit their strengths. It's okay and necessary to let people go if nothing clicks, but that should be a last resort.

Tying the last two points together, Google’s former Head People Officer Laszlo Bock stressed the importance of focusing on “the two tails.” That means focusing on high-performing and low-performing employees, as that will have the most impact on your organization as a whole.

So, yes, there is an expense to investing in both groups. But there’s also a tremendous gain to be had as well.

7. Not investing in managers.

Research shows bosses have a huge amount of influence over the effectiveness, engagement and happiness of their direct reports. It’s mostly accurate to say a company is only as strong as it’s managers.

So manager training or executive coaching might seem like obvious things to cut from the budget. Additionally, surveying your employees semi-regularly on the effectiveness of their managers again has real costs associated with it, and can be tempting to cut.

But all of those costs pale in comparison to the cost of not doing those things. Because even good managers need help, and bad managers need to be identified quickly and reassigned. If those things don’t happen, retention will spike, productivity will dip and revenues will suffer.

8. Buying cheap tools or refusing to buy needed tools.

So you saved 12 percent by buying discount computers. Or you don’t want to buy a few Photoshop licenses. Or you get your IT tools off the clearance rack.

All of this saves a few dollars upfront, sure. But it makes your people less productive, which is far more expensive in the long run.

That’s not to say a higher price always means higher quality, but get the tools your people need. And get an office that fits your brand too, your workspace itself is one of your biggest recruiting tools. Again, these all have costs associated with them, but those costs pale in comparison to the negatives of not having them.

9. Not investing in employee engagement activities.

Gallup has found that disengaged employees cost American employers alone $500 billion+ a year. That’s a huge expense.

Hence, it’s critical to invest in employee engagement activities as a company. This can be anything from giving employees time to work on ideas they are passionate about to investing in learning.

All of these programs have cost associated with them. But all of them have benefits associated with them as well, as the more engaged your workforce is, the higher your revenues. So while you don't need to have weekly happy hours or dog therapists on staff, spending no money on activities like these is a classic case of penny-wise, pound-foolish.

The takeaway

The bigger point here is that, as Isaac Newton said, every action has an equal reaction. While some of these moves may save money on expenses, they also cost money on revenues.

So it isn’t that companies can never fire an employee, cut a perk or scale back a program. It’s being aware of the cost of those cuts and how it might affect performance long-term. And there a few things an organization often do – such as any of the nine actions listed – where the long-term expense drastically outweighs the short-term benefit.

Credit: Tax Credits, Flickr

Want to build best-in-class managers at your organization? Download our ebook on how to do exactly that.

Find Top Low Commission Companies | Pay A 1% Listing Commission | Negotiate Your Savings | Create An Easier Sale | Learn How To Go FSBO | Use A Limited-Service Approach | FAQs About How To Save On Realtor Fees

When you sell your home, you obviously want to keep as much money as possible after the sale. Thankfully, there are some great ways to save on realtor fees, which can make a huge dent in your earnings.

Read on to learn how you can save money on realtor fees — from negotiating a lower rate with your agent to working with a discount real estate company that makes the process of saving easy.

For example, Clever Real Estate’s free agent-matching service connects you full-service agents from brands like Keller Williams and Century 21. Clever pre-vets its partner agents AND pre-negotiates a lower 1% real estate commission (or a flat $3,000 for homes under $350,000).

You save big while getting support from full-service agents in your area.

Learn why Clever is the best way to save on realtor fees today!

How Do Realtor Fees Work?

Before you get started, you need to know how realtor commission fees typically work.

Realtor Fees 101

After a home sells, a percentage of the home’s sale price is split between the seller’s and buyer’s agents. This usually works out to a 6% fee that’s paid out of the seller’s proceeds.

We’ll use 6% throughout this post for ease, but note that average commission rates vary across the U.S. They could be a lot lower in your area!

Both agents involved in the transaction also split their commission with their real estate brokerage.

Before you start negotiating rates, know that many brokers have pre-arranged splits with their agents. Some even prohibit their agents from negotiating on commission at all.

>> Learn more about how realtor fees work.

1. Ask Your Realtor if They’re Open to Negotiating

Sometimes, the best way to save on realtor fees is also the most straightforward — just ask your realtor if there’s any room to negotiate their fee.

Your chances of saving are actually pretty good! A Zillow study found that less than a third of sellers tried negotiating their listing fees, but over half of those who did successfully lowered their rates.

If the agent can’t cut you a deal because of their brokerage arrangement, they’ll say so. If they can, well — that’s when the negotiating starts.

>> Learn how to negotiate with an agent.

2. Offer to Sell and Buy with the Same Agent

What does a real estate agent like more than one commission? Two!

If you’re open to buying your next house with your listing agent, tell them. When you buy with the same agent, they’ll be in the position to earn commission on your home sale, and then a second commission on your purchase.

The prospect of a double commission can give you more leverage to negotiate a lower rate on both.

3. Make Your Home Easier to Sell

A real estate commission effectively pays an agent for their time. If they secure a sale in a few days, it’s much more valuable for them than a sale that takes months to close. After all, a 2% commission on a two-week job beats 3% after three months.

If you intentionally make your home easier to sell, an agent may be more willing to offer a discount on your commission. How can you do that?

Enhance its curb appeal

Buyers make up their minds about a home within seconds. Make a great first impression with fresh paint and spruced-up landscaping.

In an older or hard-to-sell home? Consider a few larger improvements that can make your house more appealing to buyers, like new garage doors and updated siding.

>> Learn about the best paint colors to sell a house.

Offer more flexibility

After-hours showings and pricing adjustments can be inconvenient — but they can also help your home sell a lot faster. Or, if you move out entirely (while keeping the home staged with furniture) it makes showings even easier for an agent.

Basically, let your agent know from the start that you’re willing to do whatever it takes to make your sale go quickly and smoothly.

4. Don’t Be Afraid to Shop Around

Always let potential agents know that you’re interviewing multiple realtors. They may be more willing to cut you a deal if they know your business is at stake or it could go to their competitors.

There are practical reasons to shop around, too.

As we mentioned, some brokerages prohibit agents from reducing their commission. You may have to interview several agents before you find one who’s even allowed — much less willing — to cut you a deal.

If finding and interviewing multiple agents sounds like a lot of work, Clever Real Estate can help.

Clever has already done the hard work of pre-vetting agents in your area. Its partner agents are full-service realtors who work at top brands like RE/MAX and Keller Williams. Clever pre-negotiates a low 1% commission (or a flat $3,000 for homes less than $350,000) with them.

5. Consider Dual Agency

Dual agency is when one agent represents both the buyer and seller. If this sounds like it might be a conflict of interest — well, it can be.

A listing agent’s goal is to get the highest possible price for their client; the buyer’s agent wants to help their client get the lowest price.

It can be incredibly difficult to balance these opposing goals. And, because of this inherent conflict, dual agency is actually illegal in a few states.

But, if you want to save on realtor fees, dual agency might be an option. Like buying and selling with the same agent, you can ask your agent to lower their commission rate as they stand to earn two commissions.

Since dual agency is complicated only consider it in limited situations, such as if:

• You already have a buyer and just need an agent to handle the paperwork
• Your agent represents a great buyer who’s ready to meet your price without negotiating
• You’re an experienced negotiator who can represent your own interests at the negotiating table

6. Offer a Lower Buyer’s Agent Commission (Maybe!)

Everything in a real estate transaction is negotiable — and that includes the 3% buyer’s agent commission. If you’re serious about avoiding realtor fees, it’s a way to do so, with a BIG caveat.

Editor’s Note

Offering a lower buyer’s agent commission is usually NOT a good idea. A competitive rate incentivizes agents to bring their buyers to your property. Remove or reduce it, and some agents may steer their clients away from your property, making it harder to sell.

That being said, if you’re in a VERY hot seller’s market with limited inventory and a desirable property, you may have enough leverage to offer a slightly lower buyer’s agent commission and still attract interest.

Don’t do away with your buyer’s agent commission entirely, or even reduce it dramatically. Lower it just below competitive rates in your area or you risk alienating buyers.

If you have one, ask your listing agent for their advice. They can let you know how much of a reduction would be appropriate — or if it’s a bad idea. No one knows the market better than an agent, so take their guidance seriously!

7. Dare to Go FSBO

The most dramatic way to save on realtor fees is to eliminate one of the agents entirely and sell your home yourself.

A “for sale by owner” (FSBO) listing can save you thousands in commission, but it’s a LOT of work.

Who should consider a FSBO listing?

If you’re serious about saving money on realtor fees, FSBO may be a good option for:

• Experienced professionals with experience in marketing, negotiation, or the legal profession (or ideally all three)
• Sellers in hot markets with low inventory who can expect to get multiple showings on the first day and multiple bids in the first week
• Sellers with a very desirable property that can literally sell itself even in a lukewarm seller’s market

Companies Save Real Money Today

How to sell FSBO, from A to Z

Our earlier guides cover almost every aspect of a FSBO sale, from the best websites to use, to how much paperwork you can expect to do. (Spoiler: a lot.)

>> Learn about the complete process of selling a house by FSBO

>> Find the best FSBO websites in 2020

>> Learn about all the paperwork involved in a FSBO sale

8. Use a Flat Fee MLS Listing Service

Only a licensed agent can list a property on your local multiple listing service (MLS). The MLS is the main directory for local buyers to find available properties, and it pushes your listing to major websites like Redfin or Zillow.

If you’re going FSBO, but still want to reach as many buyers as possible, there’s one solution.

For a few hundred dollars, a flat fee MLS service will list your home on the MLS. From there, your listing will populate onto major real estate sites so your home has the same visibility as a home being sold by an agent.

A flat fee MLS service generally doesn’t do anything beyond that, though. They don’t offer agent services like pricing help, showings, negotiation, or closing support. Some may offer very limited add-on services, like photos or for-sale signs.

But if you’ve decided on an FSBO sale, you likely don’t want an agent’s help. In that sense, a flat fee MLS listing service is a perfect — and some would say necessary — complement to a FSBO listing.

>> Learn more about flat fee MLS listing services.

9. Consider a Limited-Service Approach

A full-service agent handles every aspect of your home sale, from staging to pricing to closing coordination. But what if you don’t need all of those services?

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Limited-service real estate agents offer reduced or a la carte services so you can pick and choose only those services you need. It’s a way to save on realtor fees by reducing the support you get from an agent.

This option isn’t for everyone, though. It’s best for sellers with special expertise or experience in the real estate industry.

For example, if you’re an interior designer, you probably don’t need help with staging. Or, if you’re an attorney, you may be able to handle the negotiation and closing process, but want support for staging and showings.

If you fit that bill, a limited-service agent might make sense — and could help you save money on realtor fees.

>> Learn about the differences between full- and limited-service agents.

10. Find a Great Low Commission Company

One of the easiest ways to save money on your home sale is by working with a low commission real estate company.

Note that most of these companies help you save on your listing fees — you’ll still offer a competitive buyer’s agent commission.

There are two main types of these companies.

Discount real estate brokerages

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Discount brokerages, like Redfin, use innovative service models to make the selling process more efficient — and then they pass those savings onto their customers. Many offer flat-fee commissions or reduced commission rates around 1.5-2%.

While these can be a great option, make sure you’re aware of exactly what you’re getting.

Companies Save Real Money

Many discount brokers advertise a full-service experience, but you may face some trade-offs from working with a traditional agent.

For example, Redfin advertises a 1.5% listing commission. Redfin uses salaried, in-house agents, and a team-based approach to turn over a high number of transactions in a shorter amount of time.

This approach can sometimes result in spotty communication, mistakes, lost paperwork, and uneven service.

>> Learn about the pros and cons of working with discount real estate brokers.

Agent-matching services

Agent-matching services, like Clever Real Estate, connect sellers with pre-vetted, top agents in their local markets. These listing agents provide a full-service experience for a lower pre-negotiated commission.

With this approach, the agents get a steady stream of high-quality leads. While they may make slightly less on each sale, they can reduce marketing and outreach expenses.

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The seller gets a full-service, top of the line agent experience for often thousands less than full commission.

Save Big on Realtor Fees

If you want to save on realtor fees, we can’t recommend our friends at Clever Real Estate enough.

With their free agent-matching service, you won’t have to negotiate with an agent or do all the heavy lifting of your sale. You get a traditional agent experience for only 1% listing commission, or a flat fee of $3,000 if your home sells for less than $350,000.

Contact Clever today to save on your next home sale!

Related Links

Everything You Should Know About Realtor Fees: This definitive guide explains the typical realtor fees you’ll pay, what a fair commission is, and where the money goes.

Who Pays Realtor Fees? Does the seller really pay the buyer’s agent? Who pays the agent’s brokers? This guide answers all those questions and more.

These Companies Offer the Lowest Real Estate Commission Fees: If you’re looking to save on real estate commission, these companies offer the lowest rates — and the best service.

Read This BEFORE You Pay for a Flat Fee MLS Service: A flat fee MLS service sounds like a great deal, but it comes with big tradeoffs you need to know beforehand.

FAQs About Realtor Fees

Are real estate commissions negotiable?

Yes! Everything in a real estate transaction is negotiable — but that doesn’t mean it’ll be easy. A real estate agent is a professional negotiator, and you’re essentially asking them to do their job for less pay. The key to any negotiation is understanding the leverage you have.

How much are realtor fees?

Average realtor fees are typically 6% of the final sale price, though this average is falling across the U.S. This commission is split between the listing and buyer’s agent, with each receiving around 3%. How much money are we talking in real dollars? A 6% commission on a $250,000 home is $15,000; that same 6% on a $500,000 home would be $30,000. That’s significant money!

Who pays realtor fees?

Traditionally, the seller pays the realtor fees out of the sale proceeds. The logic is that both agents are essentially working for the seller: the listing agent is putting the home on the market, and the buyer’s agent is bringing a qualified buyer to the table.

When do you pay realtor fees?

Realtor fees are withheld from the sale proceeds at closing, then distributed to the brokerages of the listing agent and the buyer’s agent. The brokerages pay out each agent according to their agreed-upon split.