Running a business effectively isn’t all about money. Yet money and profitability are nearly always the bottom line when it comes to business, and that means you need to make sure that your books balance and there is always more coming in than going out.
The good news is that by following the money-saving suggestions below you can continue to offer the best product, service and experience for your customers while keeping your outgoings as low as possible. Read on to find out more.
Renegotiate
One of the smartest ways to save money when running a business is to renegotiate prices with your suppliers. Remember when it comes to your supply chain it pays to think of prices not as set in stone, but as approximate and changeable things that can and should be regularly negotiated.
Indeed, there are several factors that can help you negotiate a more favorable unit price with your suppliers, something that can really add up to a big saving if you buy a lot from them. First of all, look at how long you have been using them, if it’s a significant amount of time, say over a year you will have some good negotiating power as they will not want to lose a loyal customer such as you. Similarly, if you spend a decent amount of money with them, or order a lot of units, the loss of your business will cost your supplier significantly and that means you have more power to ask them to lower their prices.
Additionally, when it comes to negotiation don’t expect your supplier to be the only one that compromises. For instance, you may agree to a lower price but wish to change other aspects of the agreement such as your credit terms, your minimum order, or your order delivery date. Be sure to check that these will work in terms of your business before you agree.
Do a cost analysis for each area of your business
Another smart move when it comes to saving money while running a business is to conduct a cost analysis for each area of your company. This will provide you with vital information regarding how much you are spending, and how much value you are generating in every area. In turn, this can provide you with knowledge of where cuts can be made to save money that will have little impact on how effectively your business runs.
Check out this informative post on Fleet Cost Management: 9 Tips To Control Expenses for details on how to perform a cost analysis. You’ll also find some great additional tips on how to make savings specifically in the area of your business fleet.
Do meetings better
Why is there always one person who seems to adore the sound of their own voice so much that they want meetings to go on forever? The thing is that meetings cost money because they use up valuable resources such as personal power as well as time. That means every time a meeting overruns by a few minutes it is costing your business money, and over a year all those minutes can really add up.
To that end, if you want to reduce your business expenditure then finding more effective ways to run your meetings is a good idea. One option is to ban meetings any longer than 10 minutes, although for this to truly work your company leaders must set a good example.
Another option is to cut out traveling time for meetings by only conducting them via Zoom or another video conferencing software.
Remote working
While we are on the subject of Zoom it is one of many tools that can help your business facilitate remote working, which in turn can be a very effective way of saving money. Indeed, the savings from working from home come from the reduced need to pay for premises, utility and other business overheads.
Another additional bonus is that offering remote working can help improve the morale and overall satisfaction of your employees. This is good news because this can help you save money on recruitment and retention in the long run because you should have a lower turnover of workers.
However, you will need to make sure that your cybersecurity is good if you allow your employees to work remotely. This includes not only ensuring they have secure networks to use but also educating them on the human role of cyber security and what not to do when working online from home.
Sell what you don’t use
You can also save money when running a business if you are clever with any items like furniture you no longer use. Indeed, things that may be doing nothing but taking up valuable space in your company premises might be able to be traded in for a decent price at a liquidation firm.
You’ll save doubly too, as by decluttering your premises you will use less space, and so will not have to pay out for additional storage as you will have enough on-site.
Look after your team
For most businesses recruitment and retention are some of the highest costs. This means anything you can do to reduce these figures will help your company save money.
The important thing with recruitment and retention is that you cannot be short-sighted. Indeed, the whole mission of this aspect of your business needs to be considered over the long term. For example, it may seem easier to let a recruitment agent fill a vacancy for you quickly and easily. However, taking the time to advertise and interview your own candidates often results in a much better match, which in turn means your new recruit is less likely to leave and stay with you for the long term.
There are other things you can do to encourage long-term retention of staff including offering salaries that are over market rates, good benefits schemes, and providing training, and opportunities for promotion.
Outsource
Another great way of saving money when running a business is to outsource some tasks. This is because by outsourcing you can ensure a qualified and expert freelancer handles specific tasks, boosting their quality and effectiveness. Using a freelancer will also help you save money because you can employ them on a project-by-project basis rather than having to pay out for a full-time member with a full-time salary and benefits to work on your team.
However, when working with freelancers and outsourcers it’s important to find ones not only capable of completing the job but also ones with whom you can successfully form a bond with as well. This is because it will make the entire process a great deal easier and ensure stress is kept to a minimum during the duration of the project.
Go paperless
Last of all, a great way of saving money when running a business is to go paperless. This means getting rid of your filing cabinet and printer, and instead relying totally on electric communications. The great thing about going paperless is that it will save you a lot of money because you won’t need to buy paper, printer ink, shredders, or filing supplies.
However, it is important that you make provision for retaining files you may need for legal or financial reasons. Often the best way of doing this is to scan them as digital files and save them that way. You will also need to dispose of any paper files in line with proper regulations which may mean shredding and using a professional disposal company, especially if they contain customer documents.
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