As a small business owner, even the smallest reduction in expenses can impact your profitability. In many cases, simple steps are an effective way to improve your bottom line. Now is a great time to look carefully at your company’s expenses and see how you can spend less. Here are eight strategies for cutting business costs.
Reduce Supply Expenses
Save money on office supplies. Call different vendors to say you are price shopping for the best deal. Large personal suppliers often can beat traditional office supply vendor prices. Buy in bulk to minimize costs.
Cut Production Costs
Lower material costs while optimizing your resources. Use your waste to create another product. Consolidate the space used for production. Lease the unused area as an office or warehouse. Track and measure your operational efficiency to adjust and optimize the use of your available resources. Create performance parameters reflecting your efficiency goals with incentives to meet them.
Lower Financial Expenditures
Find ways to lower your bills. Compare insurance providers to find the most competitive rate, then ask your provider to match it. Ensure you’re not over-insured or duplicating coverage. Consolidate bank accounts when possible. When considering business expansion, perform a thorough cost-benefit analysis and future forecasting to avoid taking on unnecessary debt. Consider opportunity costs and the effect of debt payments on your cashflow. Excess debt affects your company rating, interest rates, and future borrowing ability.
Rethink Marketing Campaigns
Look at less expensive advertising methods. Use your customer email list to implement a referral program. Network more to advertise less. Do more marketing in-house. Increase social media marketing and reduce traditional marketing methods.
Get more work done in less time. Implement time-management apps to help employees focus and stay on task. Use software to track employee time usage and time spent on various types of work activities or projects. Create reasonable expectations for the amount of time needed to complete specific tasks or activities. Provide incentives for meeting or exceeding expectations.
Make the most of your physical space. Take out excess storage, supplies and paper files. Effectively place furniture and equipment to free up area. Consolidate functions or departments in your office. Use space for dual purposes, such as a meeting room that doubles as a break room or storage room that holds your copy machine.
Keep digital files rather than paper documents. Avoid printing hard copies to save money on paper, ink, printers, and storage. Send email rather than paper mail whenever possible.
Bring Aboard Temporary Workers
Instead of hiring employees to complete a project or fill another short-term need, bring aboard temporary workers. Because you don’t have to cover recruiting costs or benefits, temporary workers cost less than full-time employees.
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