In an uncertain economy, even the smallest reduction in expenses can have a big impact on profitability. The good news is that you don’t need a large-scale company overhaul. Like personal finance, it’s often simple, common-sense changes that can improve your bottom line, especially for a small business.
Reduce Supply Expenses
Save money on office supplies by calling vendors to let them know you’re price shopping. Look outside of traditional vendors and try large discount suppliers, who can often provide the best price. Look for cheaper alternatives for supplies you need, whether that’s ingredients for a food business, or switching to FEP tubing in a lab setting.
Cut Production Costs
As a business owner, you should always look for ways to cut material costs.
- Sell leftover cardboard, paper, and metal instead of sending them to be recycled.
- Centralize and consolidate the space needed for production. Lease unused space to another business, where that’s an office or a warehouse.
- Track and measure the operational efficiency of your business so you can adjust and optimize the use of available resources. Set performance parameters that reflect your goals and offer incentives for when these goals are met.
Lower Financial Expenditures
Look at your insurance policies and financial accounts for more ways to save money.
- Compare insurance providers for the most competitive rate, and then ask your current provider to match that rate.
- Consolidate insurance policies or bank accounts
- Evaluate insurance policies to make sure you’re not over-insured or duplicating coverage.
- Don’t take on unnecessary debt. Do a cost-benefit analysis and future forecasting when considering expansion. Think about the opportunity costs and the effect of debt on cash flow. Excess debt will affect company rating, interest rates, and your ability to borrow in the future.
Modernize Your Marketing Efforts
Don’t eliminate paid advertising that is working for you, but look at cheaper alternatives.
- Build your customer email list and put in place a referral prgoram. A recommendation from a customer is more likely to result in a sale than marketing.
- Network more and advertise less. Clients will hire a business with a face they recognize.
- Do more of your marketing in-house.
- Use social media more instead of traditional marketing.
Use Efficient Time Strategies
Optimizing productivity will lower your costs of doing business. Wasted time means wasted money.
- Minimize distractions and limit access to time wasters. Try productivity apps to help your employees focus and concentrate to stay on task.
- Use software to track how employees use their time, how much time is spent on different kinds of work activities or projects, and billable hours.
- Set expectations for what you think is a reasonable amount of time to complete activities or tasks. Offer incentives for meeting or exceeding these expectations.
- Schedule business activities and encourage employees to adhere to the daily and weekly schedules.
- Schedule blocks of time for meetings. Make it clear that you expect people to be one time, stick to the agenda, and wrap up at the agreed time.