Let’s face it – there is no such thing as “never having to cut costs” when running your own business. As a small business owner, you are working towards growing your business. And that takes a lot of money! From renting an office space, licenses, employees’ salaries, buying tech solutions, advertising, and marketing material… the list is endless. Wanting to cut costs wherever and whenever possible is natural.
Tips For Small Business Owners to Cut Cost
No matter how old or young your small business may be, it’s never too late to cut costs. Here are a few ways you can start working on right away to make sure you don’t end up spending more while pursuing your expansion dreams:
Office Space Requirement
Let’s begin with the major expense – office rent. If you are still in the office-hunting phase, it would be a good idea to look for less expensive locations if travelling is not a problem. And, of course, make sure it’s just enough for your needs so that you don’t end up paying too much for unnecessarily more carpet area. If you’ve already leased one, don’t forget to negotiate the terms with your landlord before renewing the lease. Having an amiable and cooperative long-term tenant is also what a landlord is looking for. You could get a better deal if you can stay on longer.
Keeping the Temperature Cool Smartly
Once you’ve got the place, you can save money using basic energy-saving techniques. Insulating the office and installing double-paned windows help keep in the heat during winters and trap the cool temperatures of the ACs in summers. You can also try installing a smart thermostat. These devices can regulate the temperature of your office space, maintaining it at a pleasant degree and saving energy. They can be programmed to turn off automatically during non-operational hours, thus saving you on energy bills. And if you do find an office with windows on opposite walls, turn off the ACs, open the windows on breezy days and let cross-ventilation work wonders.
Digitalization could help you save a lot of money on office stationery. These days everything, from visiting cards to brochures to balance sheets and reports, can be done online. Invest in software applications necessary for your bookkeeping and other needs instead of spending on printed stationery. Automating tasks such as managing invoices or making recurring payments can save money and time and help avoid delays. If you need a physical copy of certain documents, try using eco-friendly paper.
Advertising Cost Cuts
A big chunk of every small business’s budget goes towards advertising and marketing products or services. While advertising is important to get new clients and grow the business, you need not spend a fortune on it every time. Instead of printing banners, pamphlets, or brochures, try using social media to help your business reach more people at minimal expense. Even now, word-of-mouth publicity can do wonders for your business. You could participate in local events or exhibitions to showcase your business to a large audience in one go. You could boost your advertising activities during peak season for the best outcome.
Keep Your Inventory in Check
A well-stocked inventory is a strength, but it can also become a financial burden if it sits for too long. Try saving on storage space by clearing out your inventory at regular intervals. Keep track of which products sell fastest and which are not so popular. Also, if your business handles perishable products, monitor the wastage reports. You can adjust your supplies accordingly and cash in on the popular stuff rather than spending on the things that aren’t in demand or have a shorter shelf life.
Often, supplies are shipped from faraway places, incurring a heavy logistics cost. You could try looking for local suppliers (preferably bulk suppliers willing to give you a wholesale rate) to save on shipping charges. Make sure you renegotiate contracts with your suppliers to reach a better deal for both of you.
Flexible Work Schedules and Telecommuting
A silver lining in the pandemic phase was the rise of flexible working hours and telecommuting. If your business is of a nature that can allow your employees to work from home part-time, you could rent a smaller office space and save on rent. It would also save a lot on utility and maintenance bills – even coffee bills!
Financial Analysis for Proper Planning
Sometimes, small things like switching your account to another bank with lower charges can help save a sizeable amount of money. Proper tax planning, knowing what deductions your small business is eligible for and budgeting smartly can go a long way in cutting costs. Hire an expert to do a thorough financial analysis of your business and guide you in ways to optimize your financial resources while saving some money.
Regularly Monitor Expenses
Perhaps the most important tip is to stay on top of your business matters and monitor your expenses. It often so happens that certain non-essential expenses get overlooked in the day-to-day course of your business activities. By taking time to check your finances periodically, you can identify such costs and make amends.
Cutting costs, while not difficult, can be tricky at first. Hiring a professional bookkeeper can save you time and money that would otherwise be spent just identifying the problem areas. Once you get the hang of it, you can think of better ways of optimizing the available resources for small businesses.
Contact Ford Keast LLP in London for Your Accounting and Bookkeeping Needs
An experienced bookkeeper can identify and bring to your notice areas where costs are growing. The bookkeeper keeps your invoices and expenses updated to help you make informed decisions and see the outcome to plan better in the future. At Ford Keast LLP, our trained and experienced bookkeepers can provide services to take care of all your bookkeeping needs. To learn more about how Ford Keast LLP can provide you with the best bookkeeping expertise, contact us online or call us at 519-679-9330.