Every time you print a report, photocopy some notes or buy a box of paper clips, you’re incurring expenses. Small business owners often have excellent income but due to a lack of good money management and effective planning the profits produced are well down on what they could be. By making a few small changes you can reduce your expenses, improve your cash flow and increase your profit. Here are five effective ways for your small business to cut business costs.
AVOID UNNECESSARY EXPENDITURES
Keep a keen eye on your expenses. Often business owners are paying monthly dues for things that are no longer needed such as subscriptions. Review your budget and make sure that all of your expenses are necessary and current.
DEAL WITH YOUR DEBTS
What sort of debts do you have and how much of your income goes toward servicing them? Deal with your business’ debt sooner rather than later. Try to renegotiate your loans or group them together to get a better interest rate to help clear your debts more quickly.
PURCHASE IN BULK
Discover ways your business can take advantage of purchasing in bulk to improve your bottom line. Buying in bulk at wholesalers or at discount stores for things like office supplies can result in some significant savings. Also you can negotiate discount terms with your regular suppliers to cut costs. Even switching to annual software subscriptions can help, just ensure it meets your long-term IT requirements.
BUILD EFFICIENT SYSTEMS
Wages often account for a large amount of our expenses, but we can’t just trim down our staff easily without having productivity suffer. Good business systems can help you not only improve productivity, but also trim your labour costs. Have a closer look at how things are done in your business and investigate where you can streamline tasks. Creating better business systems not only produces satisfied employees but can also cut a considerable amount of business cost in the long run.
INVOLVE YOUR TEAM
A healthy and secure workplace is essential but when you are trying to cut costs, chances are people may start feeling the pinch due to cost-cutting strategies. You may have a lot of ideas on where to cut corners but it’s important to involve your team in these decisions. Speak to your people and motivate them to put forward their ideas for improved efficiency and profitability. They can often provide valuable insights that can result in savings both in time and money.
Which of these strategies can you implement in your business right now? What other cost-cutting measures do you apply in your business? We’re keen to see your posts in the comments.