Ten Ways to Cut Cost Within Your Business
No matter how much you generate in sales, the most important key is generating bottom-line profit. Profit is what provides opportunities for future growth and expansion and allows your business to build a solid base from which to operate for years to come.
Here are 10 ways to cut costs and ultimately increase profit.
Reimburse employees who drive as part of their role for mileage rather than providing a company car. It will save you on insurance, maintenance and many other costs associated with running a company car fleet.
Use virtual communication in your business to minimize office space rent. If it makes sense to take advantage of telecommuting, then do it. If it’s possible for some of your employees to work from home then do not be afraid of making that step. Your employees will thank you and so will your bank manager.
Drop ship products straight from your supplier to customers so you don’t have to worry about storage costs, including rent and insurance. These costs eat up your profits, so minimize time and costs by shipping direct.
Provide pension allowances to your employees instead of offering a full pension plan. Small businesses often can’t afford to offer this to their employees, however you can still provide a benefit to your staff by putting some money toward their own pension/savings scheme. It will save you money and still provide a benefit to your employees.
Do more networking and less paid advertising. The cost will be less and the return will be greater. People buy from people they know. So get out and network with potential clients and referral partners. This type of marketing also encourages word of mouth to pass round, so if you continue to provide good service you’ll continue to grow your customer base.
Buy a building with extra room that you can lease out. Your tenants’ rent will help cover the costs of your space. And you’ll be building equity in your business assets.
Use subcontractors if you only need part-time help. You only have to pay for labour that you need versus having un-billable bench time. It will also save you money on payroll taxes and insurance.
Use technology like video conferencing instead of actually traveling to a meeting to minimize costs. Travel costs and time can add up quickly so if your customer is willing then this can be a very cost-effective solution.
Develop payment agreements with your customers to minimize collection costs and uncollectible accounts. It doesn’t matter how much you sell if you don’t collect. The goal is to have a proactive agreement so that payment terms are very clear and you collect the money owed to you in a timely manner without the need to physically pick up cheques from your clients.
Shop around for your business insurance needs. Insurance is often high cost and unfortunately a legal necessity in many business setups so shopping around will help you save money. The key is to understand the different offerings available from your insurance providers and to conduct a thorough cost-benefit analysis. After you’ve found the best price it may be beneficial for you to see if you can purchase the policy through a cash-back website such as GreasyPalm. They offer an incentive scheme which can see you earn up to £40 cash-back for purchasing an insurance policy through them!
Implement these 10 cost-saving measures in your business and you’ll begin to see improvements in your outgoings and overall profitability.