7 Cost Saving Strategies for Small Businesses
The accepted way to increase profits in a small business is to attract new clients and take on lucrative new contracts.
11:22 22 June 2016
The accepted way to increase profits in a small business is to attract new clients and take on lucrative new contracts. If you want to grow your business, this is obviously a good plan, but there is little point in building a client base when your business overheads are unnecessarily eroding your profit margins.
Expenses soon eat into profits. Larger businesses recognize this and usually take steps to keep expenses low. Six Sigma training from http://sixsigmatrainingonline.com/ can help you streamline your business and achieve better results, but there are plenty of other ways you can cut outgoings, so read on for some tips to help you streamline your business.
Manage Your Time
Most people guilty of procrastinating when trying to get things done. The trouble is that wasting time on social media and daydreaming is bad for your business. Procrastination is the enemy of productivity and time is a valuable resource, so don’t waste it.
Shop Around for Discounts
Never take a supplier’s price at face value. There is always room for negotiation. Haggling is often seen as unseemly, but haggling over a price will score dividends if you end up paying a lot less. All suppliers have some scope for price negotiation, so use it and haggle your way down to a more acceptable figure. This applies to stock as well as service suppliers.
Don’t Buy in Bulk
The more stock you have sitting around, the more money you have tied up in the business. Clearly, you need to keep a certain level of stock or you won’t be able to fulfil your orders, but be careful not to buy in too much. The same applies to office stationery and anything else you buy in bulk. Buy what you need right now, not what you might need tomorrow.
Employ an Intern
Interns provide a great service to business. If you offer a local student an internship for a few weeks, they gain valuable workplace experience and you gain some free labor. It is a win-win situation for both of you.
Monitor Finance Charges
Finance charges are a significant cost for many businesses. Interest payments soon add up if you are late paying suppliers or settling a company credit card. Be disciplined about borrowing money. Monitor your accounts and settle invoices when they become due – and even earlier if there is a discount to be had. Be sure to shop around for the best rates when you do need to borrow money, and move to a new lender when the discount period ends.
Work from Home
Allow staff to work from home if they want to. This saves you money on office administration costs and saves them money on the cost of commuting. If possible, consider setting up your business from home, so you don’t need to spend money renting an office.
Free Advertising
Word of mouth advertising from happy customers costs you nothing, so provide a great service and ask your customers to recommend you to family and friends.
Slashing expenses is good for your business and great for your profit margins. Every little helps!