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In a previous article cost cutting measures were discussed. Many items were of value to small businesses and start-ups. In particular, they often have financial restrictions in addition to the other challenges that go with launching a new enterprise.
There are things businesses can do to reduce overheads. For instance, it is not smart to be uninsured, but obtaining the best rates on essential business insurance such as public liability will save your money and protect you from risk and potential loses.
Here are further tips that will help you to streamline your operation and make it more financially robust.
JOIN TRADE ASSOCIATIONS
It may sound odd to join an association that may charge you a fee to belong. However, not all associations do, and the benefits of being a member can far outweigh any costs. For instance, members may:
- Have access to industry related research and information that helps members make informed decisions.
- Benefit from bulk discounts or reduced costs on some services that have been negotiated by the association for its members.
There are directories of trade associations available that will assist you with identifying those that are relevant to your industry and sector.
MONITOR YOUR BUSINESS’S FINANCIAL STATEMENTS
Financial statements are an invaluable tool. They help business owners stay on top of:
- Expenses and accounts payable: If accounts are not settled by the due date you can incur interest and additional charges. The last thing you want is to add to expenses.
- Income and accounts receivable: Healthy sales are great but you want to be paid for them. To avoid cash flow problems, you need to collect outstanding payments. You need to have effective collections procedures to achieve this.
CONSIDER PREMISES ALTERNATIVES
Premises, unless you are working from home, can constitute a large chunk of your monthly expenses. Consider the following in terms of leasing:
- You may find that short-terms leases offer both lower rates and greater flexibility.
- Rent in a lower-cost area rather than in the trendy ones (unless your business relies on a certain type of footfall to make sales).
- Consider the possibility of sharing premises with another business if this will not cause issues or friction for either team.
NEGOTIATE DISCOUNTS
Ask your suppliers if they offer discounts or special rates on the goods you purchase from them. Some businesses ask and are prepared to walk away if the answer is no. This attitude sometimes results in a special deal if the supplier wants the business enough.
Suppliers are not always able to offer reduced rates or they may offer special rates on bulk orders. If you do not need large quantities, there might be another business that also uses the goods who could share orders with you. That way you both get what you need for less and the supplier is happy too.
UTILISE TECHNOLOGY
You can consider several actions with regards to technology:
- Assess what you and your staff do and the tools you currently use to carry out your work. Then, research what technology might be able to save your team time and your business money. For example, would investing in tablets or palmtops do away with the need for office supplies and more expensive technology? Could you automate some systems such as appointment confirmations?
- Take steps to become paperless. Not only is this an environmentally sound thing to do, it will reduce the amount of equipment you need, time spent doing filing and looking for records and storage space for all those documents in files.
- Make use of free, online calling, conference calls, and meeting platforms such as Skype or Zoom. This will save time and travel and telecommunications expenses.
The right technology will save your team time and your business costs.
RECYCLE
Again, this is an eco-friendly activity. In addition, donating items such as outdates mobile phones may qualify as a tax deduction and some recycling centres either pay for items or offer reduced prices on reconditioned items such as printer cartridges.
BUY USED ITEMS
These days there is a wealth of good quality, safety standard compliant items on the internet that one can buy. Whether you are looking for furniture or equipment it is a good idea to see what is on offer through eBay, Craigslist or local websites. You can go the brand-new route when business finances permit.
PLAN TAXES INCLUDING WRITE-OFFS
It is a good idea not to wait until near the end of the tax year to start your planning, especially if you are new to the area of corporate tax. Consult a tax professional who can discuss your obligations with you and give you a clear idea of dates, tax rates, returns, how write-offs work, etc. It is crucial to get this right so that your business is fully compliant and you do not incur fees for late payments or incorrect submissions.
USE MORE ECONOMICAL FORMS OF TRAVEL
If you or team members travel by train or bus for work purposes, investigate the availability of discounted season or frequent traveller tickets or cards. This also applies when you travel overseas.
For instance, in Europe the Interrail Global Pass allows travel in 33 European countries and costs less than individual tickets. London’s Oyster Card offers pay-as-you-go travel on buses, the Underground and Overground and several national rail services.
If you must take a flight and stay in hotels, use comparison websites to shop around for the best deals. Making the bookings yourself will cost less than using a travel agent or even an online agent. Do not forget to take travel insurance as illness and mishap when travelling can be expensive.
FINAL THOUGHTS
Most of these tips can be utilised by businesses in any sector and industry. However, it is not an exhaustive list and you may think of other ways that your business can reduce costs.
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