Saving money is always a great option for a business, regardless of whether they are already making money or struggling financially to pay bills.
Some eight out of 10 small businesses fail during the first 18 months, according to Bloomberg. So, while many small business owners typically search for new strategies to uplift sales, it is just as significant to develop a blueprint to trim the fat to help establish or enhance earnings growth for your company.
And with a new year approaching, now is an opportune time to carefully examine how to make your business leaner and more cost-efficient.
Here are some cost-cutting strategies to consider to get started:
Become more environmentally friendly
Energy is among the biggest expenses most businesses face. Cutting that usage by a small percentage can bring savings. To help achieve that, consider using programmable thermostats or LED light bulbs. File documents digitally or send messages by email instead of using paper. Use rags to clean up spills instead of paper towels. Buy a refillable water dispenser instead of providing bottled water.
Trim office supply costs
Inform existing vendors that you are shopping around to get the best prices on office suppliers. Don’t be afraid to let them know you are looking beyond your traditional pool of vendors. See what type of deal you can fetch from larger discount suppliers such as Amazon or Walmart. This also might cause existing vendors to be more open to negotiating new pricing options.
Better utilize your resources
Instead of sending raw materials such as paper, cardboard, and metal to a recycling center, try selling them. Consider leasing unused space for production or inventory to another entrepreneur or individual. The area, perhaps, can be used as office or warehouse space, depending on the size.
Reduce meetings
Everyone knows the term “time is money.” That saying truly applies in business. Keep salaried or hourly employees involved in making your company profitable by ensuring they are spending more time doing productive work instead of sitting in meetings. Consider sending a group email, or walking to each employee, to get an update on their progress. Cutting expenses can help boost productivity and make what you are paying employees more cost-efficient.
Check out outsourcing
Take an inventory of which services can be potentially outsourced. For instance, ask yourself if it is cheaper to have notary and signing service outsourced instead of having them done in-house. That means you have to pay one or more workers and cover their ongoing expenses for such things as license renewal and continuing education. Talk with other businesses about what services they outsource.
Cut back on financial expense
Consider price shopping to see where the best rate can be found on insurance costs. Ask your existing financial service provider or insurer to match that rate. See what bank accounts or insurance policies can be combined into one account, if possible. Do everything possible to not take on unnecessary debt. If necessary, carefully assess how that will affect your cash flow, credit rating, and ability to borrow later.