That said, knowing just where to cut back can be difficult. When your business is so important to you, it can be hard to accept supporting it less. But, it is something you need to do to succeed. Here is what you should focus on:
Shop SmarterAn obvious place to start but an important step to reducing costs in a small business. Always be looking for the best deal on your supplies and equipment. Buy in bulk, but only if you are certain you will need that number of an item. Anything that is lost or wasted is money that is lost and wasted.
It is always worth asking suppliers if they can help you with a reduction on their listed prices. You may be surprised with how often this will work out for you. Companies are often happy to provide discounts, even to wholesale prices, for other businesses. If you deal with other small businesses for your office supplies, you may even be able to organise a deal that can benefit you both for the long run. Just remember, it never hurts to ask.
This is something you should be doing constantly with things like your insurance or internet providers. What was the best deal one year may have been bested by a rival the year after. Always be on the lookout for that special offer.
Cut Out Costly ResourcesEnergy efficiency is more than just curbing climate change. It can greatly help in reducing costs in a small business. You may look at the upfront costs of an energy efficient light bulb and scream in fear. Compare that to their much longer lifespan, the reduction in energy bills and the subsidies available for ‘going green’ and you may change your mind. That’s where you can spend money to make money.
Most office electronics are now made with energy efficiency in mind. Your whole office can be run using much less power, saving you plenty at the end of the year. Alongside more sensible energy usage, such as making the most of natural light and improving insulation to reduce your need for heating, you can really start reducing costs in your small business.
And, it’s not just energy you can save on. Going digital with your admin rather than relying on printouts means much less hefty costs for printer ink and paper. Make use of cloud storage and email and you’ll not just be saving money and trees. You’ll also be saving time as work and messages are transferred instantly between you and your employees.
Save on Personal ExpensesAs well as the costs in running your office, you need to be sensible about what you are spending on your operations. We all want to offer staff as much financial support as we can, but if that is eating too much into your profits then it undermines all the hard work that goes into each sale or client. There has to be a better way.
The best start in this cost reduction is to avoid implementing a blanket policy and, instead, compensate in special cases. For example, try as much as you can to recoup travel costs from clients if you need to travel to them. Only reimburse staff from your own accounts if you absolutely have to.
Another big cost that is easy to cut down is office phone calls. Nowadays, talking with clients is not restricted to picking up the phone. This means an office phone network is not the necessity it once was. Using Skype or similar video call systems are typically a much cheaper option. For any unavoidable business calls, you may find reimbursing calls made on your team’s own phones much cheaper than signing up your whole office to a contract.
More Efficient StaffingEnsuring that your business has the talent it needs is essential. No-one will doubt the effect of a good employee. But, good employees will demand good money. Is the luxury of a dream staff one you can really afford?
Finding the right balance is a hard trial to take on because you will always want the best. You need to remember that the absolute best for your business is an upward trend in profits and reducing costs in your small business. Be realistic about who you are hiring, don’t look purely at experience and hire only on the work you have now, not what you might get.
By being more flexible with contracts and offering part-time or temporary jobs, you can cut out paying for unneeded hours. You can even look at hiring freelancers for individual projects. That way, you don’t have any permanent staffers with nothing to do and you will likely find someone to work at much lower rates than you would pay in house.
You should also make use of internships. Once again, you benefit from paying lower wages than a full-time employee and gain access to the talent of the next generation. This can also save you money on future recruitment costs as you will see their ability firsthand rather than hoping a new recruit lives up to their CV.
Reducing costs in a small business may seem a painful process but doesn’t need to be. You are likely to feel much more than financial benefit in many cases and you may quickly see that things that once seemed vital are actually quite trivial. Act as soon as you can, and you will feel the weight lift off of your shoulders.