All business organization should have a control on its cost in order to improve the overall productivity. In fact, money saving tips for small businesses is even more important as they cannot afford to overlook excess costs due to a limited amount of funds. Therefore, it is important to save cost in office, operations, marketing and many business areas. Today, more and more businesses are looking at cost cutting ideas so that it helps to sustain, develop and gain a competitive advantage in the industry that they operate. Let’s take a look at some money saving tips for small businesses.
1. Reduce Wastages
Now, there are multiple ways how you can reduce wastages. Start by making sure that errors are reduced in the operation process. For this purpose, you should ensure that the machinery and technology that you are using is in proper working condition. Replace the machinery if it has passed its working age. At the same time, see to it that your employee is skilled and well-equipped. A trained employee is always going to perform better than an untrained or semi-trained employee. Therefore, provide training to your employee to reduce wastages.
2. Advertise Wisely
Advertising expenditure forms a big part of your business cost. Hence, it is necessary to advertise wisely. Do not advertise just because your competitors are doing it. Consider the following questions before you chose a particular medium for advertising your product:
Would you reach out to your target audience using the particular medium?
Is advertising going to bring more business than what I am spending?
How long can I carry on with the advertisement campaign?
Do I have sufficient funds to make the campaign work?
Should I consider advertising in more than one medium?
These are some of the questions which are critical in helping you decide on your advertising budget. According to Suzan Burtic, the President of Legends Limousine, advertising is important, but you need to stay true to the kind that generates business. Avoid spending on things that tempt you since all want to be on TV or in a magazine. As things become difficult, it is better to stick to the advertising that generates business and not glamour.
Measure the results of the advertising campaign. If the return on investment for a particular advertising campaign is less than what is expected, then you should consider making amends to the advertisement campaign so that unnecessary money is not spent.
3. Save Cost in Office
There are many office and administrative expenses that can be reduced. Instead of spending on paper, opt for digital technology. It helps to reduce printing and storage costs. Moreover, with the help of digital technology, the overall efficiency improves considerably. The important documents can be scanned and sent rather than incurring the cost of personally sending the document to the person. Instead of buying forms from your vendor, you can make it yourself. There are several free forms available online that you can download and customize it as per your preference. Furthermore, if you want to cut costs drastically, it is better that you do not spend on buying new equipment. The use of second hand equipment such as furniture for your office brings down your cost to a large extent.
According to Ashif Mawji, president, and co-CEO, Trust Science, inefficient meetings within the organization can cost significant amounts. Assume you have an internal meeting which constitutes of 10 or more people. Now, while the meeting is in progress, not all members would be required to attend the meeting. It would have been better if these members could concentrate on their work rather than wasting their time in the meeting. Therefore, unless the meeting is very important, all members need not attend it. The same time could’ve been spent on a productive activity and earned some money for the business instead.
4. Avoid Spending for Extra Tools
Mark Remple, the principal at Point of View Media, stated that the equipment or tools that he uses for his business are expensive. The use of the latest camera or rigging gears is not going to benefit his business. Therefore, he buys what he can afford and when he can afford. He avoids purchasing them on credit. As a result, during difficult periods, there is no big payment that needs to be made. He further states that because of this perception, he has been able to succeed for more than 16 years.
Unless and until there are sufficient funds, it is better that you focus on using the necessary tools and equipment with which you are able to do your work. Similarly, you can do away with the free version or demo software as long as your work gets done. If the required software is going to benefit you in improving your efficiency and overall profits, then purchasing the software makes sense. If not, then you are increasing your overall cost instead of reducing it.
5. Use Technology
Using technology can be highly valuable for startups. It helps to bring down the overall fixed cost in terms of labor and also prevents wastages. Moreover, with technology, you are able to do the same work at a much faster speed than the laborers. There is a high degree of standardization when it comes to using technology. This prevents any errors and there is an optimal utilization of the resources. Investment in technology has long-term benefits. Although it might seem to be slightly on the higher side initially, in due course it helps cut cost which is critical when it comes to a difficult phrase in the business.
6. Ask for Discounts
Ask for discounts when it comes to dealing with your suppliers. If the relationship with your suppliers is long-term and a good one, then getting discounts for the purchase shouldn’t be a problem. Also, if you are going to order a large volume of raw materials or goods from the supplier, then you should bargain for a low price. Sometimes, the suppliers can be resolute on the terms of their pricing system and would not wish to offer any discounts. In such situations, ask if they are willing to increase the credit period for the purchases. More often than not, they should agree to this term. If not, then it is better to go to another supplier who is willing to offer you the same product at a better rate. Discounting is essential because it helps to bring the total cost of goods. However, this does not mean that you keep on asking for discounts or other offers every time you enter into a contract with suppliers.
7. Reduce Employee Spending
In order to get the most from the people, it is important that you offer some perks and other benefits to the employee. However, care should be taken that you do not spend too much on them unnecessarily. Organizing office parties and other celebration or events quite frequently are only going to reduce your business income. Also, at time, there is a misuse of credit cards issued by companies that take place by people at all levels. Therefore, set the required guidelines and limit the amount of spending on these cards. Ignorance in this aspect can cost your business some money.
Observing these money saving tips for small businesses will help you save cost in office. These cost cutting ideas can be implemented by all organizations irrespective of their industry or size. There are much more ways that you can cut on cost by leasing your equipment, renting your office space as per your size, ensuring employees don’t work overtime and many other methods. Want more cost cutting ideas for your businesses? Then, get in touch with a resource center in Edmonton.