Generally, business revolves around profits. Without profits, a business cannot survive. There are two key ways to boost profits: increasing revenue and minimizing costs. After all these lockdowns and businesses having to cease operations due to multiple covid related issues, every penny counts. Even the smallest reduction of expenditure can make a huge difference on profitability. Step back and take a good look at your business and all the elements you pay for each month or year. Are they really necessary? Or are there ways that these costs can be reduced or even removed completely?
1. Create a Budget (and Stick to It!)
It seems like an obvious one, but creating and using an effective business budget can be tricky. For businesses, it is import that you don’t sacrifice quality for lower costs, as this can have an overall negative impact on profitability if the service you are providing reduces in standard because of this. Your budget has to consider your income, business model, and customer expectations. While opting for the cheaper option in some cases will not be noticed, don’t do so enough so that customers become aware. Never forget the golden rule when creating a budget: overestimate spending, underestimate income.
2. Use Technology
Incorporating more technological advancements into your business model can help you cut costs as the necessary and mundane jobs that are usually done by staff, can be done by machine. This either reduces your need for staff, or frees them up to be completing other more profitable tasks. Technology now means that a lot of business processes can be automated, such as accounting, payroll, human resources, marketing. There are now software and platforms that can complete these tasks for you at a really high standard and a much lower cost than paying an employee. It is essential that you are not paying for technologies that you can get for free. WhatsApp and Skype are both adequate and functional platforms to use as a business, and they are both free.
3. Paperless
Companies can end up spending huge amounts on ink, paper, printers, and mailing supplies. People print the wrong things, printers break down, ink gets used up in a flash. All the costs add up and can be extortionate for very little gain. Go paperless whenever and wherever you can. We live in a digital age, so make use of it. Transition into digital invoices and bills, and file paperwork on your computer rather than printing it out. Only print things that are completely and utterly necessary, otherwise it is just a waste of money.
4. Online Marketing
Technology has been a crucial game changer in reducing business costs. Not only can it provide your company essential services at a minimal cost and store all of your important information, but it is also one of the most effective ways to market your business, product and service. Online marketing is a fast-paced, low-cost, high-result marketing channel that you cannot be missing out on. People spend hours and hours on social media each and every day; if you are not already using these platforms to promote your business, why not? Creating social media pages for your business is free and simple, and one of the most effective ways to connect with customers and expand your reach. On top of this, having a professional website comes at a low cost, as does creating and using a business blog. By using these social media and online marketing methods, you are getting and keeping your business out there in the public eye and enhancing customer connections, and it also allows you to respond to queries quickly and efficiently.
5. Business Location
The largest overhead cost for businesses is usually the space they operate in. Paying for a building and all the associated expenditures that come along with it is expensive, and potentially unnecessary. If you have seen your employees and business continue to function effectively while working at home during the pandemic, maybe you don’t need such a large office space for everyone to use at once. Consider downsizing your venue and only making it mandatory to come into office a few times a week. This will mean you are cutting building costs, and as not everyone is there using the electricity, water, and other utilities from 9 to 5 every single day, you will also see a dramatic decrease in these bills.
6. Switch Providers
You want to make sure you are paying the least possible amount of money for general, necessary services. It may seem like a lot of effort to go through but comparing your current providers to others could end up saving you a lot of money over the course of the year. Compare prices, bonuses, and promotions, ring up your current providers and tell them that if you cannot match the prices, then you’ll be taking your custom elsewhere. This can be done across all utilities, such as water, gas, electricity, broadband, waste, recycling, and payment processing.
If many of your transaction are done through credit cards, processing fees are a sneaky one to watch out for that you can end up spending a lot of money on unnecessarily. You need the lowest credit card processing fees possible for your business so you are seeing 100% of the money you are making. Covering in store, online and payments on the go, Nada has no set up costs, you can cancel at any time and they have the lowest credit card processing fees possible; in fact, they have completely eliminated them. You earn $100, you get $100; simple, easy, and how it should be done.
7. Buy Refurbished Products
If you aren’t able to turn your entire business online quite yet, which is not possible for many companies, you can do more than switch utility providers and downsize to reduce your costs. Contrary to popular belief, not everything has to be new. You can get good quality and proper functioning products and equipment second hand, from chairs and desks, to computers, printers, copiers and all other technological devices. They do not have to be brand new to last you a lifetime, and they come at a much more affordable cost.
Cutting costs is an effective way to improve company profitability. Using these simple cost-cutting tricks, you are guaranteed to be saving money and increasing profits.
