To run a successful business, we have to make sacrifices. Every business owner will need to invest time, money, and energy to ensure that organization runs smoothly. The best way of keeping your profit margins up is by controlling your expenditure.
Compared to decades ago when businesses were forced to spend on expensive computers and equipment, today’s technology has made life even more convenient. Although state-of-the-art technology has increased the standard of living while cutting down on our monthly costs, managing a business will still cost money, and as the company grows, so will the costs.
Monthly expenditure can come in various forms, including commercial property rent, equipment maintenance, loans and liabilities taken up by the company, and scheduled salaries for the workforce. Even as some businesses will have a head-start in terms of funding, it’s still crucial to reduce the spending to optimize cash flow and increase profit.
Small businesses, especially, will need to constantly check where you can cut your spending to future-proof your company. Here are some areas where you may reduce your monthly overhead.
Office Space Rent and Utilities
The monthly rent will usually bite a good chunk of your monthly expenditure. It’s better to start small, find a small space so you can register your business address. And if your staff are not needed there physically, meaning they can do their work remotely, then let them work from home. You can create a schedule for when certain people are required to come in.
If you need to meet with everyone or with a client, there are co-working spaces that lease meeting rooms. Or find a restaurant that will accommodate a private gathering.
With the ongoing public health crisis, however, many businesses have migrated to remote workspaces. If your company afford it, you can make this setup permanent. You can save on rent and save money on utilities.
For some types of businesses, however, working in an office is a must. Other than the rent, assess your monthly maintenance cost on utilities. Typically, HVAC systems will take around $75 – $200 in maintenance fees for simple tune-ups. This could go up, depending on the extent of your maintenance.
Health and safety should always be a main concern of employers and improving the air quality, and circulation in the office is key to keeping a healthy workforce. Make sure to have regular air duct cleaning services to keep the air clean and eliminate allergens and disease-causing microbes.
Speaking on HVAC, you can reduce your monthly bill by buying energy-efficient brands for your AC or other equipment. Also remind your employees to be mindful of turning off the AC and lights in a room that’s not in use. Small steps can mean big savings for you.
Cutting Down on Supply Costs
The general rule of thumb is for every penny that’s saved is a penny that’s earned. If you’re making supply purchases in bulk, you’ll want to get the best deal out of inventory acquisition. At first, you might not see any difference in the short term, but you’ll see a massive difference in the long-term.
You must monitor their supply costs continuously. This means checking for discounted prices, and in some instances, alternate sources of supply. In some situations, people are embarrassed to ask for discounts. You’d be surprised to know that many businesses are willing to offer discounts on equipment, products, and services to win loyal customers.
Cutting Down on Marketing Costs
Marketing has always been an integral part of any business, and this will affect how businesses will funnel in customers and earnings. This is the digital age and there are more cost-effective means of advertising your products and services. You don’t need to spend exorbitant fees on TV or newspaper advertisements or announce your business on a huge billboard.
Find out where your customers are, and most likely they’re looking down than up. They’re checking their phones or computers for things they want to buy and the services they need. Lucky for you, digital marketing is a much cheaper and cost-effective way of advertising your goods.
You might want to start with building an online presence through social media and creating a website that can generate engagement. E-mail marketing is also a great way of doing low-cost marketing without having to spend hundreds of dollars on advertisements.
There are many ways to cut down on business expenditure. Doing so will help you reduce your expenses and increase your profit. Just don’t do it at the expense of your people and operation. There’s a big difference between being money-smart and a cheapskate.