5 Quick Ways to Trim Your Business Costs
Businesses often don’t think to cut costs or trim expenses unless they absolutely need to. When your business is in the black and cash is flowing, it’s fairly easy not to think about the need to save money or to find ways to get more for your money. Quick and easy ways to cut costs is something your company should always be on the lookout for. Cutting costs can help a thriving business thrive even more and can be the difference between life and death for a struggling one.
Put a Stricter Spending Policy Into Place
A common piece of advice given to individuals who want to save money is to track spending. The same advice works for your business, especially if it has multiple departments that each have their own budget. Pay close attention to what employees are spending on, such as miscellaneous office supplies or company funded lunches or snacks, then consider ways to rein in that spending.
You can trim spending by setting up an approval system for each purchase, instead of allowing departments to buy whatever, whenever as long as it comes under budget. Having to get approval before buying new office equipment will encourage departments to really question if they need the purchase.
Find Ways to Consolidate
Spending money on celebrations and special lunches for each department separately can add up financially and lead to a considerable amount of waste. Have you ever been to a business meeting or departmental celebration that had bagels, pizza or sandwiches and that didn’t have massive amounts of food left over? At many companies, that food is just tossed out after the party or meeting is over.
But if you decide to hold meetings for several departments on the same day or to combine several department trainings or celebrations into one, you can cut down on the amount of food you need to order and on the amount of food that ends up in the trash.
Swap Paid Services for Free Ones
Many services that businesses once had to pay for are now available for free or for a considerably reduced rate. Trading a paid service for a free one can be a particularly effective way to save money in a pinch. You can always switch back to the paid service once your business has righted itself financially, if you find that that free option doesn’t cover your needs.
A few example of services that you can get for free or pretty close to it include phone service (such as Skype or Uber Conference for conference calls), radio or music streaming (such as Pandora or Spotify), and an office suite (such as Google Docs).
Get Rid of Certain “Extras”
Offering employees perks or extras can make your company a more appealing place to work. But those same extras can also drain your financial coffers during a lean period. Re-evaluate the perks you’re offering and consider eliminating them or offering lower cost alternatives. For example, offering a company car to every manager can be a nice bonus, but it’s incredibly expensive. Instead of paying for cars, offer to reimburse employees for mileage or gas, when they need to drive for company-related functions.
Getting rid of bottled water can be another way to save your company some money. Instead of having pricey bottled water delivered on a regular basis, you can have a water filtration system installed, so that employees can easily get access to hot or cold water.
Ask Employees to Work Less
Letting go of certain employees can help your business cut costs. But if you’re already working with a lean team, you might not be able to let anyone go. Another way to save money is to have your team work fewer hours. For example, don’t allow non-exempt hourly employees to work more than 40 hours a week, so that you aren’t paying for overtime. You can also ask each employee to cut their hours by about 10 percent each week, having them work 35 or 36 hours instead of 40.
If you need more assistance finding ways to cut your company’s costs and spending, ASAP, the team at New Direction Capital is here to help. Contact us today for more details.
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