Increasing revenue and bringing in more business is what every small business owner aims to achieve. However, even if your sales are doing well, your profit can easily get eaten up by uncontrolled business costs. In order to reap and keep the majority of your revenue, you should use all the available tools to cut those unnecessary costs. Even if your competitors seem to overlook them, you will not. Here are some practical ways of cutting down your business expenses.
Ask for Discounts
Get discounts whenever and wherever you can. Many top retailers give discounts for small businesses, even though they don’t advertise it. If you are outfitting your office with big-ticket items (such as new equipment), be sure to mention that you own a small business. It will get you a better deal most of the times and you’ll be saving money.
Outsourcing
Finding a new employee, hiring him or her, investing in training, vacation times, insurances, and sick leaves – cost money. In order to save money on the whole process, companies are turning to outsourcing. Basically, they hire qualified professionals from outside the company to work remotely for a fraction of traditional employee’s cost. These people work for themselves, have their portfolios posted on their personal websites, as well as sites such as Upwork.com or Freelancer.com. Companies save a lot of money by not having to bring an in-house accountant, writer, graphic designer, or web developer – and pay them a full-time payroll.
Lower Insurance Cost
This can be done in various ways, but the crucial step is finding and comparing different insurance policies, because you are interested in the best rate out there. Consider using an independent insurance agent for this type of needs. These agents can find great rates (depending on your unique needs) and are not financially bound to any company.
Improve Warehouse Efficiency
Only a productive warehouse is a profitable warehouse. Improve your warehouse productivity in order to save your company money, and you can do it by standardizing warehouse processes, educating warehouse managers, incorporating the use of modern technology, and creating an environment of clear and open communication. Also optimize and maximize every inch of available space. For example, if you are only using 13 feet of your vertical space in a warehouse that has 30 foot high ceilings, consider mounting a taller racking system, as well as purchasing an elevated work platform (it makes the worker capable of double production because there is no waste of energy due to climbing up ladders and arranging packages manually).
Use Energy-Efficient Appliances
In other words – go green in your office. By using energy-efficient appliances and compact fluorescent light bulbs, you can reduce your utility bills. Don’t forget that you can contact your power company and request a free energy audit. They will send an inspector who will perform an assessment of your office and point out ways you can reduce your energy bills.
Cut Out Paper
By using online space services, such as DropBox, Google Docs, and Amazon Cloud Drive for storing your electronic files, there won’t be a need for using that much paper. About 40% of it, according to Xerox, gets discarded within 24 hours of anybody printing on it. Add the cost of printing supplies, labor, and energy; you will then see how electronic file storage is much more practical, accessible, and an effective money saver.
Be Financially Responsible
Unnecessary expenses, such as fees on business credit cards, credit card processing fees, and late payments on loans drain accounts of many small businesses. By paying your bills on time, you’ll save your company thousands of dollars. However, this is more complicated than balancing your personal finances, but you can make use of various tools for keeping track of finances.
Cutting expenses can only mean more profit for your business. So, analyze your expenses and optimize business processes. It will pave the road towards business expansion and economic stability of your company.
