Naturally the aim of any business, however big or small, is to generate the largest profit possible and be constantly finding new ways to increase income. Whilst cutting down expenses can be a relatively easy task, it is that balance of cutting costs efficiently without compromising the quality of your product or service that is the principal challenge.
Whether you’re situated in offices, shops, factories or a mixture of all, rent or the cost of your premises is likely to be one of the biggest outgoings of your monthly budget. Moving further away from the centre of the town or city is always likely to reduce costs, but if your location is vital to your business moving into an older building or office sharing will lower your total costs.
Bills and fuel costs are another unavoidable drain on your funds. Try not to automatically renew your contracts at the end of each year; shop around to find the best deal. If your energy costs are particularly high, switch to energy-efficient alternatives to lightbulbs and other appliances.
Printing is an everyday cost that can quickly add up if not monitored carefully. It may sound obvious but at the click of a button all documents can be printed double-sided, reducing half the amount of paper needed. Ink can be pricey, but buying in bulk or changing your house font will drastically reduce costs.
Production and manufacturing
The most effective way of cutting down on on production expenses is at the design stage. It will eliminate the need to tackle each stage as an isolated element, which is ultimately a waste of labour and resources.
Packaging is often the best place to start, especially if you find yourself having to discard of leftover materials at the end of each month. Why not sell these items or find ways to reuse them in the manufacturing process.
If you have areas of unused space within your factories or warehouses, it’s well worth renting them out to other businesses or simply making sure they are contributing to your production in the most effective way they can.
Although advertising is pricey, it’s something you need to carefully consider before cutting down costs. Be selective with your advertising campaigns and keep in mind that small-scale and frequent is often more effective than blowing your budget on one large campaign, which might not necessarily bring in the results you expected.
Focus on social media promotions if your budget is low, as you are able to reach out to a large marget without having to spend extortionate amounts.
As always, word-of-mouth has more power over consumers than even the most expensive ad campaigns, so networking is really going to boost awareness of your brand without having to spend.
Businesses are heavily reliant on the software, hardware and IT services that are used to keep their company going. Though much of the software we use is essential and cannot be cut, think about all the licenses you’re paying for and whether there is any overlapping software, where having both isn’t a necessity.
As for IT equipment, refurbished computers and other machinery is often just as efficient as brand-new equipment, yet at a considerably lower cost.
Cutting down your business expenses doesn’t have to result in lowering the quality of your product or service. Beginning to think about the above outgoings will highlight the areas in which you are spending unnecessarily.
How else do you look to take control of your business expenses? Leave your comments and ideas below.
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