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How to Reduce Software Costs for Your Business

You could be saving hundreds or thousands every year

Note: “Business” is defined very broadly in this article, these tips can be adapted for a personal project, side hustle, startup venture, or anything else.

Colorful bandages each with a unique SaaS tool’s logo on them.
Photo by Webstacks on Unsplash

Online businesses allow entrepreneurs to generate revenue often at a fraction of the cost of traditional brick-and-mortar businesses. But the cost of running them can quickly add up as your business grows. Software expenses can easily cost thousands of dollars per year, as you start adding subscriptions to your arsenal of digital tools. In a video by YouTuber Ali Abdaal, he reported spending $3600 per month to sustain his online business. But, his business is likely to pull in a revenue of $3 million this year so, the exorbitant amount of money spent on software makes a lot of sense.

Most of us don’t have businesses that bring in millions of dollars of revenue so we need to be more selective on what we spend on and how much we spend. The role software plays in each business is highly variable, and depends a lot on individual circumstances. But, it’s likely to play some part in your business and, it’s in your best interest to find the best available software for the most affordable price — whatever that means to you.

1. Find Deals or Discounts

Just like any other purchase, you can find deals and discounts to reduce the cost of software subscriptions. There are two ways to do this: using your “unfair advantages” to find relevant deals and startup benefits platforms and websites.

An unfair advantage is traditionally defined, in the startup world, as a unique edge a company has over its competitors, but the definition can be broadened to anything about your circumstances that may help you.

For instance, being a college/university student can be seen as an unfair advantage. While you may be paying thousands for tuition, students (both in undergrad and grad school) have an arsenal of software available to them at a free or discounted price. Often students are unaware of these deals because they aren’t regularly advertised. Similarly, there are several deals non-profit organizations can take advantage of to keep their costs down.

There are plenty of other unfair advantages that can help you save on software, but they may be harder to find. You might be able to access some software through your work, or another organization you are a part of. Some SaaS companies might also have “hidden deals” that aren’t publicized, so you can always reach out to them and explain your circumstances to see if you can get a discount. For example, if you are a small business owner but are unable to pay for enterprise-level software, you might be able to get a discount by communicating with the customer service.

Here are some deals you can check out right now:

If you can’t find discounts related to your unfair advantages, you can use startup benefits platforms that provide discounts on software. Secret is an excellent website for purchasing discounted software. By purchasing a membership plan (there is a free tier too) you are eligible to receive credits for popular SaaS tools like Notion, Airtable, AWS, and Stripe. The plans range between $39–$199 per year, but the credits are worth thousands of dollars so, you will get your money’s worth. The best part is all plans are only $39 after the first year, allowing you to save even more money. A membership-free alternative is Startup Deals, a website that aggregates current deals for startup founders.

2. Use One-Time Purchase Alternatives instead of Monthly/Annual Billing

$5 or $10 per month isn’t much but, multiple subscriptions can easily lead to upwards of $50 per month spent on software. While one-time purchases often appear more expensive, they save you money in the long run. App Sumo is a great place to shop around for software. Most of the deals on the website are “lifetime deals”, giving you full access to SaaS tools at a sizable discount. Many of them are from up-and-coming companies, but they usually list well-known alternatives for comparison.

Let’s take a look at a deal currently listed on App Sumo for a video tool called VidStep.

VidStep is a video platform that allows you to easily create step by step videos. It is an alternative to Loom and TechSmith, and the listed lifetime deal is $59 (for one user) for the Premium tier. If you go to the VidStep website, the Premium subscription is $45 per month. So by purchasing the App Sumo deal, you are saving $481 this year and potentially hundreds of dollars in the future.

3. Consider Open Source Software Alternatives

Open Source refers to any software that is freely available for use, modification, and redistribution. It’s usually built by individual developers or small teams and receives little to no funding or marketing. The quality of an open-source product primarily defines its success. Using open-source software has its advantages and disadvantages that you should evaluate for your specific business. While open-source software (OSS) is usually free to use, privacy-friendly, and highly customizable, it usually doesn’t come with dedicated support staff. If you run into any issues, you will likely have to lean on community forums and the internet. You are on your own if there are problems with the software, so OSS is a riskier option than commercial solutions. However, the nature of OSS can also lead to exciting innovation.

If you consider yourself a tech-savvy person with higher risk tolerance, implementing open-source software into your business can be a cost-saving move.

Also, many open-source software applications have their own hosted solutions that may be a better fit for you. They usually cost more than self-hosting but require much less technical effort on your part.

For example, Ghost a popular open-source CMS, allows you to self-host with Digital Ocean for $5/month for a “Basic” website, or you can purchase Ghost(Pro), their managed hosting service starting at $9/month.

Even though managed hosting options for OSS costs money, they can still be cheaper than commercial solutions.

Let’s compare two password managers, Bitwarden (an OSS) and LastPass (a commercial option). Comparing the personal plans, Bitwarden is $10/year while LastPass is $36/year, saving you $26/year if you go with Bitwarden. The savings are minimal with the personal plan but are more noticeable with the Business/Enterprise pricing. Bitwarden’s Enterprise plan is $60/user/year and, LastPass is $72/user/year. If you are running a business with 50 employees, Bitwarden will save you $600/year.

The nature of your savings will be dependent on the features and pricing structure of each alternative you are considering and will not always be a given, but it is worth considering.

Here are two websites you can use to explore OSS alternatives for tools you are currently using or potential options that can fulfill your future needs:

Software is an essential component of your business, but it doesn’t have to be an expensive one. The money you save on software can be redirected to other areas of your business or increase your profit margins.



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Breaking out of my identity crisis by writing about whatever I want for the next six months. Living the multi-passionate, part-time creator life.