Operating a business means that you must control expenses in every way possible in order to boost profit. To increase that bottom line, a reduction in business costs is a must. Here are a few simple ways to keep outgoing funds to a minimum:
1. Reduce the Costs of Supplies
When you are running any type of business, such as grocery store or restaurant, that makes purchases from wholesale suppliers, you will soon find out that getting a great deal on materials and deliveries can save you tons of money.
While many business owners are timid about asking for discounts, many businesses are more than happy to offer deals to other companies. Offering a reciprocal discount and paying your supply bills on time actually increases the likelihood that supply businesses will work with you. If that doesn’t work, you can always check the prices of the competitors of your usual suppliers to see if they offer better-priced stock, or you can monitor industry sales and promotions and stock up on certain items that are reasonably-priced.
Some companies have even started working with other businesses, even direct competitors, to pool money and save on supplies by buying them in bulk. Known as “co-opetition,” this idea has really started to take off around London.
2. Consider Switching Energy Suppliers
Realize that you do have a choice when it comes to your business’s suppliers of natural gas and electricity. The switching process is easy and you can get it done right from your computer or cellphone by simply going online!
“Energy quote comparison services, tools, and case studies to help companies start, run, and grow their businesses are the wave of the future,” says EnergySeek CEO Ollie Smith, “Companies need to be aware that they have choices when it comes to energy.”
First, find a comparative business that will find the best deal for your business’s particular energy needs. All you will need to do is provide the website with your postcode and a general idea of what your typical monthly usage is, or at least a good estimate. Enter all the information on the webpage and let the calculator find you the best prices and services for your company.
Once you find providers that meet your needs, you can call them up and set up new accounts. The providers should send you information packets through the mail to get you started. You will not have any interruptions in power, nor will you have to pay termination fees for disconnecting your prior service.
3. Cut Down on Staff
If your business has been going through a particularly-slow period, a good way to save some money is to reduce the number of staff members you have working at a given time. There are many ways to accomplish this.
You can try working with contractors or freelancers to take care of small tasks or jobs that are meant to be recurring, such as painting a room or catering a party. Or, you can hire your own children or other family members to take care of some of the smaller chores that are part of the business, such as cleaning, copywriting advertisements, and counting the cash drawer at the end of the night. You can even ask a retired household member or a stay-at-home parent to answer the phones in his or her spare time.
Sometimes, if business is extraordinarily slow, you can try asking some of your older employees to voluntarily take some unpaid time off. Many would be glad to, and you will never know unless you ask them.
4. Keep Office Space to a Minimum
If you are running a business that requires office space, you will want to keep your rent as low as you possibly can. If you live in an area where rent is reasonable because commercial real estate is plentiful, then you should take advantage of the situation. Price smaller spaces and see if you can negotiate a better price than the one you are already paying. If you find that most office space in the area is less expensive than what you are currently paying, see if you can make a deal with the landlord to pay a fairer rate.
To save even more money, if possible, try to operate your business out of your own home. This will save you a tremendous amount of money. You won’t have to pay extra for utilities, rent, or insurance. Just be careful to observe local laws and ordinances as well as property by-laws before moving your business into your residence.
In conclusion, it is imperative that you drive down your costs to run a successful business. Using these tips should be a great start toward saving you money that can contribute to your profits in the long run.