06 Apr 2017
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.
Image courtesy of Sira Anamwong at FreeDigitalPhotos.net
17 Sep 2015
Why do people go into business? One of the answers is to make money. When you own a for-profit business, you are continually looking for ways to increase your profits. But, increasing the amount of money your company makes is just one part of the equation. If you are able to cut expenses and reduce the amount your business spends, you’ll also be able to make your company more profitable. There are several, out-of-the-box ways you can trim your business’ expenses.
One way to reduce your company’s advertising and marketing costs is to partner up with another business in your area. For example, if you run a real estate agency, you might reach out to a mortgage company and see if it would be interested in sharing mailing lists or running a joint promotion with you. If you own a store in a shopping plaza, see if the stores that neighbor yours would be interested in distributing flyers for your store to their customers. You can offer to distribute coupons or flyers for their stores to your own customers.
Make the Most of Mailings
If you send your customers or potential customers physical mail from time to time, such as catalogs and brochures, trim your costs by making sure your mailings are working for you. Have someone from your company review your mailing list, weeding out any customers who haven’t responded for a certain amount of time. The US Postal Service also has a number of tools that will help you maximize your mailing list and avoid sending mail to incorrect addresses or to addresses that people have left years ago. Look into bulk mail procedures to further reduce your postage costs.
Go Online When You Can
Web-based companies are often able to offer the same services for a much lower price than brick and mortar companies. For example, you can usually get business cards, brochures and other printed products for considerably less from an online company than you would from a print store. The basic rule to shop around before you commit to one vendor over another applies here. When you need supplies or a specific service, get a quote from a few online companies and compare it to a quote from a brick and mortar store, then choose the offer that will help you cut costs while meeting your needs.
Try to Go Green
Going green where and when you can doesn’t just help the planet. It also helps your bottom line. Remind employees to power down equipment before they leave the office for the evening, to cut your electrical costs. Switch to LED light bulbs, which cost more upfront, but last for much longer than other types of bulbs and use less energy. If you haven’t already, try to digitize as much as possible, from your files to your company’s communications. Ask employees to only print documents when absolutely necessary and to try to use two-sided printing whenever they can.
Outsource and Go Virtual
Your business might not need to fill certain positions on a full-time basis. Working with independent contractors reduces your company’s expenses as you aren’t responsible for paying FICA taxes or for providing benefits to contractors such as a retirement match or health insurance. Going the contract route can also mean that you are able to work with a more experienced professional for a lower rate.
For example, you might not be ready to hire a chief financial officer full time yet, but still need guidance when it comes to managing your company’s finances or putting together a strategic plan for growth. Hiring a virtual CFO allows you to work with a professional in the field, for much less than the cost of hiring someone with equivalent experience. Another option for cutting employee costs is to lease your staff from a staffing agency or hire temporary workers to boost your team during busy periods, without the expense of going through a lengthy hiring process.
Saving your business money doesn’t just mean looking for the lowest rates when it comes to financing and finding the banks that offer you the best deal. It also means finding ways to creative cut costs during the every day operations of your company.
Image courtesy of 1shots at FreeDigitalPhotos.net