Business Cost Reduction: How to Cut Expenses
Like Sol Luckman once said, it takes money to make money.
All businesses come with expenses, but they don’t have to send your business into bankruptcy. Business cost reduction is one of the easiest ways to see your gross profit peak.
Continue reading for ways to save your business money and only spend on the things that matter.
1. Staff
Employees are one of the biggest costs to a business. The amount of staff and their individual wages can make or break a small business.
However, if you require staff to run the day to day operations, DO NOT cut back on staff.
You may save yourself money in the short term, but your business can’t grow while you’re cutting back staff.
One way you can work with your staff to save money is to pre-approve expenses. If your staff are traveling for work or heading overnight to another city then ensure that you and they are clear on what they can and can’t spend.
Set out a pre-agreed budget for travel, food, hotels, taxis and any business meetings they may need to attend. If the staff member then decides to go to a luxurious restaurant for dinner, or order the whole room service menu, your business won’t foot the bill!
2. Technology
Technology can both save you money and spend it unnecessarily.
Ensure you shop around for phone line, internet, and tv deals so you know you are getting the best price for your business. Consider a VPN to keep your business safe and secure from cybercrime. Learn more about NordVPN here.
You can also invest in technology to save your business some money. If your appliances are outdated, and you pay a huge electric bill each month, then consider upgrading business appliances. New technology means that appliances are becoming more and more energy efficient.
This includes laptops, computers, refrigerators, heaters, and air conditioning. You could even consider going green with solar panels or a small wind turbine. Save the environment and your pocket!
3. Budget
Create a business budget with your accountant and stick to it.
Try not to spend on credit cards, or if you do, ensure the bill is paid BEFORE you are charged interest.
Keep the budget just enough for your cash to flow, but not enough that you are overspending each month.
If you’ve been in operation for several years, using a different accountant with a fresh set of eyes will save you money. They can highlight spending that your beloved long term accountant may not have seen.
4. Premises
If you run a business from business premises, then shop around.
Look to see if you are paying a fair rental price for the type of property, location, and size. You may find a better, cheaper building just across town. You won’t know unless you look!
5. Banking
Again, check your bank statements and bank charges and shop around. If you transfer internationally then using a transfer service may be cheaper than your local bank.
Moving to another bank may save you thousands each year.
Business Cost Reduction – Start Today
Up your profit by reducing your costs!
Business cost reduction is easy. Look for any large monthly bills and find a way to reduce them. Your accountant or financial advisor can help with this.
Once you start shopping around for better deals, better prices and more efficient technology, you’ll save your business thousands in costs each year.
For more ways to save money, check out our blog.