There can be many costs involved with running a business and sometimes not all of them are crucial to the level of profit you make. If you find your costs are out-weighing your income leaving you with just a small profit, if any, it’s time to re-evaluate a few things in order to grow.
Even if your business is making a healthy profit, there’s always something that you can do to reduce costs and take your business to the next level.
Consider these 10 tips for saving money in business…
- Analyse And Compare
Regularly analyse and compare prices for the things you spend most of your money on. Whether it’s utilities such as broadband, gas, electric, or compulsory costs like business insurance, it’s always worth comparing prices with other providers to see if you can get them cheaper.
If your business relies on manufacturing a product, see if the manufacturer can do you a deal as well as shopping around for a cheaper alternative.
You may also use tools and apps for things like payroll, CRM, invoices etc – Do they offer a discount if you pay annually?
2. Move Premises
If you own your business premises, the value of the property may have increased since you purchased it. In which case, moving to a different space that costs less whilst selling or renting the property you own could be a way for you to bank some cash. If you rent somewhere, you could also negotiate with the landlord so that you pay the rent in a way that benefits your cash flow allowing you to keep money in the business for as long as possible.
- Overlap Skill Set
If you’re running a business where there is an overlap in skills across members of your team, you can save money by eliminating a role and paying another employee to do it. However, this only works if the employee has enough time and resource to fulfil the extra work. In most cases, employees have lots of spare time, they just choose to take longer doing tasks because that’s all they have to do. For example, you could pay your marketing assistant an extra £5,000pa to cover more work but in reality you’ll be saving money as you’ll have one less full salary to pay.
- Be strategic With Your Advertising Budget
Analysing which methods are working and not working means you can try other methods which could have better results and save you money. Cutting traditional advertising such as online and PPC in favour of low-cost options such as PR and inbound marketing can help you reach a more targeted audience as well as save you money.
- Choose Cloud Storage
Opting to use cloud storage over hardware can not only save you money but make life a lot easier. Cloud services allow you to access information remotely, which is great if you work from multiple locations or have staff in different locations. If you’re business doesn’t depend on being run from one location, you could save money by letting your staff work from home and avoid the cost of an office.
- Go Green
As well as being good for the planet and earning you some points with customers, it’s also a way to cut costs. Simple moves such as keeping equipment on a power strip and turning it off when not in use, or replacing an existing printer with one that prints on both sides of the paper, thus reducing paper waste and cost. Reducing energy use you will also reduce your costs.
- Hire Smart
Hiring inexperienced staff who are willing to learn will save you money on recruitment fees , salaries and also give someone driven a chance to succeed and grow in a career. Interns are a great option as they cost very little (sometimes nothing). Young graduates straight out of university and just young people in general are often very driven and keen to learn new skills as they go. Candidates like this can be seen as a risk by some business owners but they are actually great alternatives to high salary employees even if you’re not looking to cut costs.
- Collaborate For Marketing
Pairing up with another business that has a different audience to you can mean you reach new customers, for free! You can do this by promoting each other on social media, doing joint competitions, embedding their product or service in your newsletters, placing a banner on yours/their website etc….
To get the best results, partner with a business that has a similar audience to yours but avoid a conflict of interest. For instance, if you’re a builder looking for more business and your friend is a bathroom designer, you could both harness the same customers without causing each other to lose business.
- Reward Profit Makers
Whilst this seems like a cost rather than a saving, the longterm affects can be quite the opposite. I you have a member of staff that is constantly bringing in new leads/customers that account for direct profit in the business, reward them. The more appreciated they feel in their role the harder they’ll work and soon the income they bring to the business will outweigh the cost of the reward.
- Low Cost Meetings
If your staff are constantly having to attend meetings, especially ones that require commuting, that’s less time at their desk actively working. Using software like da pulse, means you and your employees can keep track of projects and converse with other members of staff regarding them. This solution won’t work if you have employees that need to go and meet customers, but it’s a great option to reduce internal business meeting costs.