Guess what? Throwing your money around like a millionaire with an endless supply is a bad idea when you are in business. In fact, some would say it was madness, as not only does it make you seem kind of stupid, but it will also run your company into the ground quicker than you can say ‘bankruptcy!’ Luckily, there are plenty of savvy ways smart business owners can cut costs, just keep reading to find out what they are.
This is a contributed post. Please refer to my disclosure for more information.
Renegotiate your supplier terms
Most suppliers like you to pay for your goods within 30 days, and while this is great for them, it can be disastrous for the small business receiving the resources, especially if what they have in the kitty doesn’t cover it. In fact, it can lead them to take out expensive business loans or drawn on lines of credit with high-interest charges just to cover the debt and ensure a continued supply.
Happily, all this hassle and cost can be avoided if you take the time to renegotiate your payment term with your suppliers. In fact, if you are a good customer, and already have a track record of paying on time and order significant amounts, it’s well within the realms of possibility that you can get 50 or even 60-day terms.
That’s a whole two month before you need to settle your bill, which in the world do business can give you a lot of capital to play with, and stop you having to go into debt.
Outsource tasks that you don’t specialise in
Next, it is a fact that there is much advice and guidance on just about anything online these days, to do with running a small business. However, it is often still much more cost effective to outsource those tasks in which you don’t specialise.
Why? Well, firstly if you want things done correctly, and professionally it just makes sense to give them to someone that completes similar tasks day in and day out. For example, keeping the books and preparing your taxes may be something that you can get some advice on, but with a wealth of firms like https://www.qdosaccounting.com/ offering these services, it is really worth the bother to do it yourself? Especially when you have other important things to which to decide your time!
Secondly, while you can learn how to do things online, many people forget that they take up a lot of time and focus, both of which are then drawn away from other essential tasks in your business, whether you end up doing them, or you delegate these to be of your employees.
Of course, even if you read how to do something online, then there is no guarantee you will be any good at it, so it’s essential to consider outsourcing whenever you are faced with a specialised and critical task with which you are unfamiliar.
Review your processes
Also, to cut costs, it is essential that you review the processes that you work by regularly. The reason for this is that even small unnecessary, or redundant tasks can result in a great deal of time wasted, and as you are paying your employees as well as your business overheads, such tasks will end up costing you money while adding no value to your business.
To that end, it can be useful to audit any manufacturing or production processes, as well as administration tasks to ensure that they are being done efficiently. A particularly useful example of this is when a company chooses to use a document management systems like ones discussed at http://www.whymeridian.com/ that provide standardised and customisable templates for all official documents. Something that means a considerable amount of time can be saved as each worker does not need to write out every email and letter they send individually.
Have a remote working policy
Lastly, to cut costs in your small business, it can be smart to make use of some of the more modern way of working. One of these is remote working where there is no central office for staff, and they work from home or at a location of their choice.
The potential savings here are high, as the post at https://www.lifesize.com/ suggest because office rental and overheads are eliminated, as is the cost of hardware like computers in some cases too. Of course, there are options to lease hot desking space and meeting rooms, if and when your team does need to get together. However, as you will be only be paying by the hour or day, it still makes a policy of remote working a very cost-effective option for your business.
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