Your outgoing expenses directly impact your business profits. Spend less, make more money; it is as simple as that. Unfortunately, year on year, the costs your small business needs to meet are increasing. From rising insurance premiums and fuel costs for your company cars to higher supplier prices, it seems your business’ budget is always creaking at the seams. This is why it’s crucial to keep a close eye on your business costs. Just a few pence on the price of something you use regularly can make a big dent in your profits over time. This article outlines seven ways you may be able to cut costs and make your bottom line significantly healthier.
- Relocate to Cheaper Premises
If a large portion of your expenses goes towards paying a lease for business premises, it’s worth exploring other options. This could be as simple as negotiating better terms with your landlord, or you could investigate other locations with cheaper rent.
For some businesses, it may be that you don’t actually need to operate from a commercial office space. If you can run your business from home, you could save money on rent, insurance, utility and even taxes. Some companies are able to work on a mobile basis, such as consultants who visit clients at their offices, or skilled tradespeople, such as hairdressers or electricians who carry out their work in the home or business of their customers.
- Try Bartering Rather than Buying Goods and Services
Trading your service or goods for the services or product you need, or bartering, has been a successful business tactic for centuries. It provides businesses with a way to get what they need without parting with cash. For example, a painter and decorator could decorate a solicitor’s offices in exchange for legal advice or services. A graphic designer could work on a new logo for printing business in exchange for printed promotional materials.
For bartering to be successful, both parties need to uphold their end of the bargain and to be clear about the services being traded. Do a good job, and the other party may provide paid work for you in the future.
- Reduce Vehicle Expenses
If your business uses a vehicle or a fleet of vehicles, it’s likely that the fuel, maintenance and servicing costs are a big drain on your resources. The simplest way to reduce your vehicle costs is to use them less, for example, only for essential trips, but that’s often not realistic. Buying second-hand vehicles which are in good condition is often more cost-effective than buying brand new.
You should consider the types of vehicles you are using in terms of fuel consumption. While electric cars may be more costly to buy initially, you may save more in the long term in terms of cheaper running and maintenance. There may also be some rebates, grants or tax benefits (as well as better brand perception as a ‘green’ company) to reward you for taking the more environmentally friendly option.
- Reduce Cost of Supplies
Spending just a few pennies less on supplies which you use regularly could make a significant difference to your bottom line. If you buy goods in bulk, there are often great savings to be made. It’s tempting to stick with suppliers you are familiar with, but it’s always worth shopping around to see if another supplier could provide the same service at a cheaper cost.
For example, many offices use a considerable amount of ink and toner for printing documents, but companies like www.cartridgepeople.com regularly offer discounts on the most commonly used products. Keep an eye on your supplier costs to ensure you’re aware of even the slightest increases. If you do manage to find another supplier offering cheaper deals, try bringing this to the attention of your current supplier before moving as they may offer to match it. This means you get a more affordable deal for a service you’re familiar with.
- Cut Advertising Costs
Thanks to the internet and social media platforms, advertising and marketing no longer need to be expensive. It’s not necessarily simple or easy, but it is possible to use social media and your website to generate free sales leads for your business. Twitter, Facebook, Instagram and YouTube are some of the most popular platforms used by businesses to share engaging content, product information and industry expertise, which people can enjoy and share. Email marketing is also a low-cost way to promote your business’ special offers, but you need to ensure you’re following the General Data Protection Regulation (GDPR), which came into effect in 2018.
- Compare Insurance Quotes
While it’s essential to have as much insurance as you can afford, it’s often possible to find a better deal by shopping around and comparing multiple insurance providers. Your insurance needs to cover all the critical aspects of your business as insufficient coverage could be disastrous should the worst happen. Consult with a professional insurance broker who can advise you about all the different options available to you and recommend the best deals.
Your insurance needs are likely to change as your business grows and you lose/acquire assets, so make sure you’re reviewing this regularly. Sometimes you may be able to find better insurance deals by upgrading security and safety systems on your premises as you’ll be perceived as a lower risk for the insurance company.
- Try to Reduce Your Staffing Costs
Trying to cut staffing costs doesn’t necessarily mean letting people go. Small businesses can often reduce payroll costs by some simple reorganisation and using resources more wisely. Some employees may be willing to take unpaid time off during less busy periods so they can find work elsewhere – no one enjoys being bored after all! Older employees or those with a young child may also appreciate more time off. Depending on the nature of your business you may be able to use family members for some tasks such as writing marketing copy, keeping records or acting as a telephone receptionist fielding your calls when you’re unavailable. Even young family members may be able to help out with simple tasks which not only saves you money but introduces them to the world of work.