II haven’t met a business owner yet who wants their business to spend more than they have to.
Putting your business on a diet (also known as eliminating unwanted expenses) is a sure fire way to increase your profit. Implementing cost-containment measures will bring both immediate financial benefits and also help you stay competitive.
Let’s Get Started
There’s no time like the present. Let’s look at a few tried and tested approaches.
- Replace manual paper-based processes with computerised ones to eliminate inefficiency.
- Cancel (or postpone) non-essential subscriptions or services. Do you really need a Rolls Royce service when a cheaper version is available? Does your office need so many glossy magazines?
- Stop and think whether you need to print that 10 page email or photocopy single sided.
- Send invoices via email rather than post them. You’ll save postage costs and can keep an audit trail of when you sent them…no more “I didn’t receive it” excuses from customers!
Some ideas will only produce small savings but everyone counts and adds up. You’ll be pleasantly surprised on how much $50 here and $20 there will add to your bottom line.
Reduce Your Carbon Footprint
Reduce your carbon footprint, and save money at the same time! Reduce your energy consumption, or change electricity providers. The following can be implemented fairly quickly:
- Buy energy-efficient office equipment and appliances with four or five star energy efficiency ratings.
- Unplug appliances you’re not using.
- Use motion detectors or timers to your office equipment so they automatically switch off when you’re not using them.
- It may seem obvious, but you’d be surprised how much juice your computers, monitors, printers, etc consume sitting idle but are switched on. Issue your staff with instructions to “switch-off” when they’re not using equipment.
- Turn computers and copiers to a “sleep mode” or turned off completely overnight.
Embrace Technology
Become more tech-savvy. You don’t need a Bachelor Degree in Computer Science to benefit from using modern technology. Consider using:
- Cloud-based services such as Dropbox or Google Drive to store or back-up your data online securely, rather than big filing cabinets that take up space. Dropbox offers a free trial period for thirty days.
- The internet to make calls. Providers such as Skype offer both free and paid services.
- Outsourcing your accounting and administration to a virtual accounting firm or virtual bookkeeping firm. Many are based overseas but employ qualified accountants at a fraction of the cost of employing your own staff.
Review Your Marketing Expenses
When was the last time you reviewed your return on marketing investment? Marketing expenses can quickly escalate if not managed. Open-ended marketing contracts and glossy magazines can all hurt the wallet.
You’d be surprised by the savings you can make by managing much of your marketing yourself. Create a Facebook business page or review your website. Add good quality content and photos to attract new followers. Engage and interact with them. You can get a simple, yet professional looking, website for less than $400 these days.
Conclusion
There’s a fine line between eliminating or reducing costs and cutting too close to the bone.
You’ll need to be prudent in some areas to avoid constraining your ability to operate. For example, cutting back on training, advertising, replacing equipment may offer short-term gains but may be damaging later.
Address this by periodically reviewing the expenses you’ve cut back on and the effect it’s had. Consult with staff to gauge their views – both before and afterwards.
Be careful not to become over-dependent on one supplier because they offer you massive discounts. What would you do if their business fails?
Changes you make don’t have to be permanent. Consider trial periods. If a saving idea didn’t work or deliver what you expected, consider other options. You haven’t failed…you’ve learned something new.
At Business Advisory Services, we’re proud to offer practical solutions not stuffy textbook ones. Gives us a call if we can help.
