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Cost Cutting for Businesses
It has never been more important for businesses of all sizes to keep an eye on the bottom line.
Removing unnecessary purchases, going digital and having regular overviews of outgoings will reduce your business costs. Along with good time management, they are quick and simple to implement and won't decrease the quality of your work.
Reducing Business Costs
Get into the habit of questioning the need, cost and source of everything your business uses.
When considering a new purchase for your business, ask yourself the following:
- Is it necessary?
- Is it really necessary? (Will it have a direct impact on your profits?)
- Is there a cheaper alternative?
- Where is the best place to get this? (Could you buy wholesale, bulk, make use of discounts, trade skills etc.?)
If it is something you know you will need regularly, consider buying in bulk~ but be warned, just because something says it's on offer doesn't mean it's the cheapest. Take a few minutes to compare prices, quantities and features. It works the other way around as well~ there is no point buying in bulk just because it works out cheaper per unit, if you're not going to use in bulk!
One of the best ways to cut business costs is to go digital!
Use modern technology to your advantage and wherever possible convert products and communications to digital formats. This reduces the need for materials, hardware (such as printers) and even some paid subscriptions or travelling.
- Send emails with attachments instead of letters and paper documents.
- Use Skype free video calls instead of phone line rental and in person communications.
- Produce digital products instead of tangible ones (e.g. MP3's, eBooks etc.)
- Provide online video training instead of sending people to courses.
A huge part of most business costs is marketing. Nowadays it's much easier to find cheap or free marketing alternatives. Just because all of your competitors are using one particular method, doesn't mean you should and that it's the best choice for your business. Do some research and make an informed decision.
A common mistake many businesses make is to not keep track of results. Take a close look at your marketing costs and judge whether you are getting your money's worth or not. As mentioned above, it's always worth shopping around and this also applies to advertising. Try to use at least three different forms of marketing at the same time and keep a close eye on their progress. After 1-3 months, if one type isn't working swap it for another.
Types of Marketing
Don't Waste Time
Most businesses, whether a sole trader or large corporation, spend most of their days doing 'busywork'. People are kept busy, rather than productive. This is not only soul destroying, it also wastes time and money.
Businesses are paying for people to spend their time doing things that won't make any difference to the bottom line and so lose money by paying wages for non-productivity.
Take a close look at what work is actually being done and whether it is necessary. Do you need to pull everyone in for a big meeting that takes 2 hours? Could your points be made through an email or face-to-face to those who need to know?
A lot of busywork is created because of a lack of trust and responsibility. Give others a chance to show they can be trusted with more than just the mundane. Busywork is also a sign of procrastination~ bite the bullet and get on with what really needs to be done and that will make an impact on your profits and productivity. If you find this difficult, ask yourself why you are reluctant to take the next step.
Areas of work that could be reduced/ cut out:
- checking in~ reporting to others
- perfecting a product or website*
*Of course you cannot sell a product that is defective, but I see time and again people using perfecting a product or their website as an excuse not to move forward. Sometimes you just have to take the next step with what you have~ it's more than likely good enough already.