Whether you are new to the world of business, or have owned your own venture for the past decade, running an organization can be costly in both time and money. From retail to commodities, you may be surprised at just how much it costs you to keep your business running efficiently.
However, you cannot afford to run a business cheaply, as this can cause issues elsewhere. Instead, you need to create a detailed plan and make note of your finances. By having a budget in place, you’re able to see where your money is going, and whether there are any costs you can cut down on. Whether you need to reduce your business spending significantly or make minimal changes for peace of mind, doing so could improve your business’s bottom line. Here’s how to assess and cut unnecessary business expenditure.
Is Your Office Space Costing You?
You need to review all your options before renting out an office space; there is a lot you need to consider, and by renting a space without much thought, you’re at risk of overpaying or moving to a dodgy area which is troublesome if you have regular visits from clients. Therefore, research areas and consider how much it’s going to cost, the cost of commute, and if the neighbourhood is going to lose or up in value.
Other causes for concern is whether the space is too big for you and your company; if there’s a cheaper option; the up-keep is unusually high and whether maintenance is a costly issue. Also, if your business is based predominantly online and you have many remote workers, you’ll want to either invest in a small office space. Of course, if you can lose all ties with your office space, then this could save you a lot of money. Yet, this is only possible if you’re a one-man-band.
Check Your Staffing Costs
You staffing costs may shock you, especially if you’ve been overpaying employees for too long without knowing better. If you are the owner of a smaller venture or start-up, freelancers can provide the ideal solution for short-term projects – meaning you can pay a daily rate as supposed to a full-time salary. This is ideal if you’re wanting to reduce costs for roles you only need every now and then.
You could also hire an intern, who is able to provide low-cost labour for you. Of course, if they perform well, then you can offer them full-time employment at a fraction of the cost and have them work up the ranks. Another way to lessen staffing costs is to give additional responsibilities to existing employees; this is far less expensive than hiring brand new employees, as although you’ll need to give the employee a pay rise, it won’t be a salary for a whole new individual. Therefore, if you were looking for alternative staffing solutions to help reduce your business expenditure, then contractors or interns could provide you with the solution that you are looking for.
Cut Shipping Costs
If your firm sends large or oversized letters and parcels out to customers or a mailing list, you may find you are overspending without even realizing. If you ship packages on a regular basis, why not research alternate providers, such as ground shipping companies, to help cut expensive airfare costs that are sure to be costing your business a small fortune?
The same can be said for mail. Do you find that your workforce has to spend hours each week waiting in line at the post office? Then consider investing in a franking machine – the ideal in-house solution for expensive postal costs. Not only can you use a franking machine to seal and brand your envelopes from the comfort of your workplace, but you can also save hours previously lost at the mail office, improving efficiency and cutting costs for you and your business. Click here for more information. You can also save with online accounting software, making it easy to manage and compliant.
Ask for Discounts
Have you been doing business with the same supplier for years but never asked for a discount? If so, then you could be missing out. Bartering has been used across the centuries as a means to exchange goods and cut costs – so why not put this practice to good use for your business? However, as with any business-to-business exchange, you will need to do your homework first to check that this is a valid option. For bartering to be a valuable alternative, both parties who agree must fulfil what they have agreed. In the case of service-to-service exchanges, make sure that you establish clear boundaries and set timelines to avoid any disagreements.
You should also be aware that for tax purposes, you will need to treat bartering as a normal business transaction, treated as though you have been paid for the services or goods exchanged. So if you are looking to expand your business relationships or maybe even obtain some additional benefits, then bartering is a win for any business.
Check Supply Costs
You might have had the same supplier for years, but are they still a cost-effective alternative for your business? Every few months you will want to check the market to make sure that you aren’t being overcharged for a product or service that you could get cheaper elsewhere. As a business owner, you should be constantly checking supply costs, asking for cost price options and investigating where else you can source your goods.
Another top tip for improving popularity with your suppliers and other businesses is to make sure that you pay any outstanding invoices on time. Late payment fees and credit card charges soon add up each year, not to mention some suppliers may offer you a marked reduction in the overall cost if you make full payment early. You could also consider ‘co-opetition’, finding other businesses that operate in your market and sharing the costs of supplies and goods. From coffee beans to office stationery or even advertising costs, this is an ideal solution if you are looking to reduce unnecessary expenditure for your business.
Print Less Documents
While you might still need hard copies of some documents for your business records, such as invoices or statements, the amount of paperwork that you print could also be ramping up your costs as well as causing the environment harm. Send emails and save your postage for your products and shipments to customers. Rather than spend money on printing paper (which is becoming increasingly expensive), become more of a digital company. The same also applies to printing ink, which is upping in price each and every year.
The same applies to the amount of paper that you print at your office or as part of your venture. Ink cartridges, paper supplies and even the overall storage of your documents are all expenses that you can cut down – especially now that we operate in a more digitally focused age. Solutions such as a hard drive or creating scanned versions of more important paperwork will ensure that you can keep more important information on file. However, you don’t need to keep paper copies of every file or record.
Be sure to make sure that your client records are protected using a password, and do make sure that you regularly back up your systems or run anti-virus upgrades. It can be incredibly uncomfortable telling long-established customers that you have lost all of their records due to a data breach or hackers – don’t let this happen to your firm. By making a few small tweaks, you will notice a huge difference in the amount you are spending.
Cut Travel Costs
Travel might be one of the perks of running a business, but travelling too much could also be creating unnecessary costs. Remember that when you send an employee on a business trip, you are also covering all of their expenses including accommodation, meals and any other extra costs.
By limiting your travelling, you will save not only money, but also time. Although some instances call for travelling from A to B, before you buy a plane ticket or fill up your employee’s car, consider if online tools such as Skype or Webex (or even FaceTime) can be used when conducting meetings instead. Treat business trips as an occasional perk, and try to limit any airfare or lost time and money. However, do not skimp on costs if clients are too important or if deals are too vital to the integrity of your company.
In today’s digital age, it can be easy to reduce your outgoings on simple business practices, such as the amount you print or travel. However, you need to assess your business costs as a whole before you start making cuts. Asking for discounts isn’t embarrassing, and by checking out other supplier options you’re being smart, not unfaithful. Be a smart employers and consider all options as opportunities to save.