How to cut business costs in 16 simple waysSmall Business Advice 2 January 2018
When it comes to running your business, saving money might be easier than you think. While you can’t fully eradicate costs, you can significantly reduce them with a few simple changes. Here are some useful tips on how to cut business costs and boost your profit margin whether you’re a new or established business:
- Go paperless
The little things add up in business – like the cost of stamps, paper, stationary, ink cartridges and filing cabinets. Use email whenever possible, especially for simple messages like greeting new customers or vendor requests. Install software that monitors print usage and identify areas where a specific department can improve.
- Negotiate prices with suppliers
Most suppliers will be open to negations. After all, they don’t want to lose a regular customer – remind them you have a track record of past purchases or provide them with your latest sales projections. Perhaps talk to multiple suppliers to encourage competitive pricing.
- Reduce energy consumption
Keep a closer eye on how much energy you use via a smart meter – you get real-time readings via a digital display or online portal. This gives you a better idea of how much your bills might be and helps you pinpoint which activities use unnecessary energy.
- Review employee roles
Think about your people. While employee reviews can be a sensitive subject, they can lead to the some of the biggest gains in cutting costs and provide valuable insights. For example, you might find an ongoing take is no longer necessary or two roles can be combined into one.
- Hire freelancers or contractors
Need a specific skillset for a project or task? Outsource the work and bring in someone on a temporary rather than permanent basis. You won’t have to pay a full-time salary that includes benefits – instead you pay an hourly or daily rate until the job’s done.
- Hire interns
This can be a good deal for both parties – the intern gains valuable experience, while you get a low-cost temporary employee. As well as the monetary benefits for your business, you get the chance to run the rule over the best young talent.
- Change your telephone system
Traditional landlines can be expensive. Take advantage of virtual phone services like Skype for free phone calls between those who have downloaded the software, helping you save a tonne on long or international calls.
- Pay invoices early.
The faster you pay invoices, the more likely you are to save. Lots of suppliers offer discounts if you pay invoices within a few days of receiving them – this can help build a trusting, long-lasting relationship.
- Buy used equipment
In a world where technology is always advancing, there are big discounts to be had on used software and hardware that still works to a high standard. Bear in mind that even after a few months of release many new products become significantly cheaper.
- Relocate your offices
Ask yourself, where precisely is the best location for your business? Perhaps you’re already there. The cost of living, commuting and rent will change from one location to the next. So whether you’re moving within the building, across town or to another city, make sure do your research.
- Get a virtual office
Not so dependent on a physical office? Convert to a virtual presence, your employees can work from home. And with no office, you eradicate two of the biggest costs: rent and energy bills.
- Review your business insurance
If your business has grown or changed over the past year, there’s a good chance that your insurance no longer provides adequate coverage. Look over your policy before renewal and take the time to meet with your provider – ask them exactly what’s covered and what your policy limits are.
- Negotiate lower credit card APRs
Banks and credit card companies are usually open to negotiation. So if you borrow money via your credit card, call them to see if they can reduce the interest rate. The worst they can say is ‘No’.
- Review your card machine provider
Better rates mean bigger savings. If you accept credit cards, we can help you with the cost of exiting your current contract early while getting you set up with a brand new merchant account and card reader in just 3 working days (If you are looking to accept payments online, it takes only 24 hours to setup our online payment gateway).
- Reduce your inventory levels
Getting one large shipment might seem like a good deal, but small businesses can’t afford to tie up too much of their working capital in inventory. Find the right balance by using inventory management software stock.
- Cut down on meetings
Take a look at both your own and your employee’s calendar – you might be surprised at how many hours per week are spent in meetings. Think about the cost and benefits to your business. There’s a good chance you can reduce meeting time and free up more time for completing tasks.